4 ms·

There's a different clock on there for unfunded liabilities at $132T. If that package is unfunded, it's not even a dent to the overall.

by oDot 7y ago

wahern 7y ago
Unfunded liabilities are future liabilities projected out 75 years. Much of it will never come to pass. For example, the part that constitutes Social Security can and almost certainly will be mostly wiped away in an instant by increasing the retirement age by a few years and increasing the payroll tax cut-off. And I'll bet you a beer that the $132 trillion figure is calculated using year-of-expenditure, not constant dollars, which means the predictions are literally inflated. I tried to confirm but couldn't find the original sources and methodology. AFAIU year-of-expenditure is typical and best practice for long-term budgeting, but laypeople invariably compare it to constant dollar costs, which makes such figures seem larger than they really are, particularly when they include up to 75 years of monetary inflation. For example, California High-speed Rail is always quoted in year-of-expenditure. Much of the difference in the original ~$30 billion figure to the current seemingly insane ~$100 billion figure is because the construction timeline was stretched out by another decade or more since the original proposal. The longer construction takes, the more inflation figures into projections, the greater the figures, the less public support there is, the more construction is delayed by scared politicians, etc. It's a horrible cycle.
- oDot 7y ago
  Interesting, thank you for that
- arcticbull 7y ago
  I actually had no idea most long-term projects were presented in year-of-expenditure dollars. As someone who pays attention to this stuff, if I didn't realize, I'd wager nobody voting realizes this either.
- omgwtfbyobbq 7y ago
  Exactly. It's nothing new either. The retirement age was last increased in 1983. As people live longer we need to adjust payments into the trust, retirement age, and payments from the trust proportionally. https://www.ssa.gov/planners/retire/background.html https://www.ssa.gov/planners/retire/background.html
  - bsanr2 7y ago
    This is going to be an interesting conundrum, however, when one considers that both Gen X and Millennials are projected to live shorter lives than the Baby Boomers.
    - deleted 7y ago
      [deleted]

There's a different clock on there for unfunded liabilities at $132T. If that package is unfunded, it's not even a dent to the overall.

by oDot 7y ago

There's a different clock on there for unfunded liabilities at $132T. If that package is unfunded, it's not even a dent to the overall.

wahern 7y ago

Unfunded liabilities are future liabilities projected out 75 years. Much of it will never come to pass. For example, the part that constitutes Social Security can and almost certainly will be mostly wiped away in an instant by increasing the retirement age by a few years and increasing the payroll tax cut-off. And I'll bet you a beer that the $132 trillion figure is calculated using year-of-expenditure, not constant dollars, which means the predictions are literally inflated. I tried to confirm but couldn't find the original sources and methodology. AFAIU year-of-expenditure is typical and best practice for long-term budgeting, but laypeople invariably compare it to constant dollar costs, which makes such figures seem larger than they really are, particularly when they include up to 75 years of monetary inflation. For example, California High-speed Rail is always quoted in year-of-expenditure. Much of the difference in the original ~$30 billion figure to the current seemingly insane ~$100 billion figure is because the construction timeline was stretched out by another decade or more since the original proposal. The longer construction takes, the more inflation figures into projections, the greater the figures, the less public support there is, the more construction is delayed by scared politicians, etc. It's a horrible cycle.

oDot 7y ago
Interesting, thank you for that
arcticbull 7y ago
I actually had no idea most long-term projects were presented in year-of-expenditure dollars. As someone who pays attention to this stuff, if I didn't realize, I'd wager nobody voting realizes this either.
omgwtfbyobbq 7y ago
Exactly. It's nothing new either. The retirement age was last increased in 1983. As people live longer we need to adjust payments into the trust, retirement age, and payments from the trust proportionally. https://www.ssa.gov/planners/retire/background.html https://www.ssa.gov/planners/retire/background.html
- bsanr2 7y ago
  This is going to be an interesting conundrum, however, when one considers that both Gen X and Millennials are projected to live shorter lives than the Baby Boomers.
  - deleted 7y ago
    [deleted]