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View Diary: The Demographic Horror Story and Other Children’s Tales (26 comments)

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  •  Dependency Ratios: Aged vs Total (7+ / 0-)

    Dean could have made the argument about 'Covered Worker Ratios' even stronger, but maybe at the risk of distracting from his Productivity argument. The above Table from the 2012 Report shows two different metrics for Dependency Ratios (the ratio of non-working age people to working age) which is to say Aged and Total. The Aged column is a reasonable proxy of the much cited Worker-Retiree Ratio and does show a shift over time which however never quite gets to 2:1. But the Total column adds in Children and so gives the actual number of dependents per working age adult and from that metric we will NEVER get back to the Total Dependency Ratios seen in the 1960s.

    That is workers in the future will be supporting more retirees but also correspondingly less children. Which is only logical, those 60s children are the same Boomers as those 2030 retirees, it is the same demographic pig moving through the societal python.

    And you could layer over this the fact that more working age adults are participating in the workforce than in the 60s, there really were one income middle class households then. Today not so much. And THEN add in Productivity over all that and the whole inverted demographic pyramid argument falls apart. - SocSec.Defender at - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

    by Bruce Webb on Fri Mar 29, 2013 at 08:31:03 AM PDT

    •  Maybe (0+ / 0-)

      First, the ratio that matters is people paying into the system versus people receiving benefits. It is driven largely by the age structure but not entirely since there are beneficiaries who are children, and of working age, and of course not everyone of working age is in fact working.

      Here's the worker to beneficiary ratio from the Trustees report, and it does get to 2.0 by 2035 (in the "intermediate scenario).

      Second, whether having more older people to support but fewer children to support is a net gain depends entirely on how expensive those two "dependent" populations relative to each other and how expensive they are relative to the past.

      If we have fewer children but they are each more expensive to raise than in the past , and we have more elderly people and they are more expensive to support than in the past, how does this net out?

      It is not only the number that matters but time. 0-18 is 18 years. That is not changing. But the period of time in retirement has been increasing (earlier retirement and longer life combined) and is expected to increase. Another way to say this is that the over 65 population is considerably older than it was in the past. And now we think the period of young people's dependency is increasing as well as entry into the labor force seems is being delayed.

      Any information you have about the relative cost of these two "dependent" populations would be much appreciated, but based on just population ratios this tells us very little.

      •  Well that is the point (7+ / 0-)

        the crisismongers NEVER say 'beneficiaries'. They ALWAYS frame it in terms of poor Gen-X workers laboring at three jobs to pay for greens fees and Lexus payments for Greedy Geezers.

        If I had a nickel for every time that people said that the 'worker retiree ration had gone from 5 to 1 in 1960 to a projected 2 to 1 in 2040' I would be out buying rounds at the sports bar right now. Instead they carefully glide from 'beneficiaries' to 'retirees' assuming, and correctly that most people just won't think of the survivors and disabled that go into those 'beneficiary' numbers.

        And time in retirement hasn't increased as much as most people suggest. The Social Security Tables provide figures for life expectancy at birth AND life expectancy at age 65. All in the same Tables. Yet once again the crisismongers ALWAYS cite the former numbers to 'prove' that people are living 17 years in retirement instead of dropping dead at age 65 like they did in 1936. In reality the improvement for people at FRA is 5 years for men and 7 years for women.

        There are honest discussions to be had about the demographic challenges facing Social Security. But the 'reformers' don't seem particularly interested and instead swing between cherry picking and selling apples for oranges comparisons.

        Kind of a fruit market of mendacity. - SocSec.Defender at - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

        by Bruce Webb on Fri Mar 29, 2013 at 01:46:47 PM PDT

        [ Parent ]

        •  Do you think I am a crisis monger? (0+ / 0-)

          My big problem with the way social security is discussed here is that you are either a stalwart defender who doesn't dare mention that we have any kind of fiscal issue, no matter how modest, or you are a crisis-monger, pernicious destroyer, blah blah blah.

          I agree there are a lot of lairs who want to undermine the system .there are also plenty of realists who say facing the real but modest problems is worth talking about and getting right.

          I think I was making an cogent and somewhat useful point. Then you responded to all the lying crisis mongers.

          Sure there are lots of liars:

          Most liars who implicate the dependency ratio actually talk about how the system used have 15 workers for each retiree, and now we are 2. They probably have no idea that almost all of that fall was due program growth, not age structure. But we have also paid for the increased cost of the system through economic growth and higher taxes. Its pretty straightforward.

          Liars also don;t understand life expectancy data.

          But lots of "defenders" don't either, sadly

          I think you are mistaken about the growing length of time in retirement. It is not simply about life expectancy increasing but about the age at retirement. Back in 1960 people retired later and lived shorter lives. Now they retire earlier and live longer.

          There is a strong recent trend toward working longer that is probably a positive thing.

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