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The Center for Economic and Policy Research (CEPR) issued a Briefing Paper (June, 2005) titled "Things That Will Happen Before Social Security Faces a Shortfall" The full report is available on the Internet. Use Google to find it.

Because of the verbosity of the report's Executive Summary, rather than quote it, I will restate it:

The Congressional Budget Office (CBO) projects that Social Security (SS) will face a shortfall in 2052. Until then, SS is projected to pay all benefits and, after that, 80% of benefits, which will be 30% larger than those received by current retirees. Social Security trustees, of whom 4 of 6 are Bush appointees, say 2042 is the shortfall date.

Many argue that the projected SS shortfall poses a serious problem, or even a crisis. Although defining a 'crisis' is subjective, it is worth noting other issues, receiving less attention than SS, the country will face in the next 47 years. Those who argue the importance of addressing the projected SS shortfall must implicitly believe it is more pressing than other largely neglected issues. Based on current trends, we can expect that, by 2052:

Health care and prescription drug spending measured at the 2005 level of GDP will increase by almost $6,000 per person.

The dollar's value will decline 30% against its trading partners' currencies, adding 2% to the annual rate of inflation and reducing annual consumption by $2,000 per person.

Jail population will reach almost 7,000,000, increasing costs by $310 billion measured at the 2005 level of GDP or $1,000 per person.

The housing bubble will burst destroying more than $5 trillion in wealth created by the run-up in home prices, a loss of $17,000 per person.

China's economy will be twice the size of the U.S. economy and China's defense spending will be four to six times that projected for the U.S. by the CBO.

India's economy will be 1.5 times the size of the U.S. economy and India's defense spending will be three times that projected for the U.S. by the CBO.

Extinction of animal and plant species in the tens of thousands will occur due to resource extraction, pollution and deforestation.

The earth's temperature will rise 1.0 to 4.0 degrees, causing rising sea levels, melting glaciers and advancing tropical diseases into temperate zones.

For the most part, the above trends receive almost no attention from either political leaders or the media. Presumably, they see soaring health care costs or plunging home prices as less consequential than the projected shortfall in SS. Others may assess the importance of these issues relative to SS differently.


The points raised in the CEPR report by Co-Director Dean Baker bring several obvious questions to mind. Should a country destined to be a third-place world power start rethinking its foreign policy sooner rather than later? Should the environment be given more protection, rather than continuing its rapacious exploitation? Should our society find a better solution to its problem members other than sweeping them into a discard bin? Should we continue to amass huge foreign trade imbalances? Good questions all for us to ponder.

Special thanks to CRW for apprising me of the CEPR Briefing Paper.