Laurence J Kotlikoff, Columnist

Social Security Hole Overwhelms Taxes, Cuts

July 11, 2012 at 6:30 PM EDT

Laurence J. Kotlikoff is an economics professor at Boston University and the author of "Jimmy Stewart Is Dead: Ending the World's Ongoing Financial Plague With Limited Purpose Banking." Kotlikoff served as a senior economist on President Ronald Reagan's Council of Economic Advisers, and is now a research associate at the National Bureau of Economic Research and the president of Economic Security Planning, Inc., a maker of financial planning software. He received a bachelor's in economics from the University of Pennsylvania and a doctorate in economics from Harvard University. He is also the coauthor of "The Coming Generational Storm: What You Need to Know about America's Economic Future" and "Spend 'til the End: The Revolutionary Guide to Raising Your Living Standard - Today and When You Retire."

Before it’s here, it’s on the Bloomberg Terminal

LEARN MORE

This article is for subscribers only.

Now that health care is off the front burner, it’s time to fix Social Security. Social Security’s trustees say the system needs only “modest changes.” In fact, the system is desperately broke.

The proof is buried deep in the trustees’ own 2012 report in a complex table, numbered IV.B6. The system’s actuaries prepare the report’s tables. But what the trustees make of them is up to the trustees. Clearly this year, as in others, the trustees ignored table IV.B6. How else could they have come up with their blase statement that Congress should address Social Security’s finances “in a timely way”?

Before it’s here, it’s on the Bloomberg Terminal

LEARN MORE