Say Anything Blog

Paul Krugman notes that Social Security Trustees are projecting a more positive outlook on the program’s actuarial balance.

The latest report of the Social Security Trustees is out. I think the key message is what has happened to the estimate of actuarial balance — the difference between projected outlays and projected revenues over the next 75 years. This is the thing that’s supposed to get steadily worse as time goes by, as the 75-year window contains ever fewer years in which the baby boomers are in the work force, paying payroll taxes, and ever more years when the boomers are out of the work force and collecting benefits.

In fact, however, the actuarial balance has been improving rather than worsening. It’s now better than it’s been since 1993. What this tells us is that projections made in the mid-to-late 1990s were, in the light of subsequent revisions, way too pessimistic.

Moral: Social Security’s financial problem is relatively minor. It doesn’t deserve the emphasis it receives from most pundits.

So what is driving this new and improved actuarial balance?  Kevin Drum notes that its taxes paid by illegal immigrants.

Table IV.B9 has only one significant change from 2007: “Methods and programmatic data.” And what might that entail?

Scroll down for the answer: immigrants. To be specific, better estimates of the taxes and benefits received by illegal immigrants — or, as the trustees refer to them, “other-immigrants”

Social Security is more solvent than we previously thought because millions of illegal immigrants are paying into it with no expectation of ever collecting benefits.  Are we really supposed to feel like this is good news?  That it somehow makes Social Security a good program that isn’t costing us way too much money even without the contributions of illegals?

I mean, its not even like illegals are even the ones directly paying those payroll taxes.  The people who purchase the goods and services made or provided by illegals are paying more to cover the cost of wages inflated by payroll taxes.  So, really, we Americans are still the ones paying for Social Security.  The illegals are just getting less in wages.