This page has been archived and commenting is disabled.
US Payrolls to Rise 1.1mm Per Month in 2011 – SSTF to Congress
The following is a graph that tracks percentage changes in GDP and the
growth of SS payroll tax revenue from 1990 through 2010. While there is
not a perfect correlation between the two data sets one can see that
the lines do track each other. The exception is 2010. The economy has
made a recovery from the 09 recession. But SS payroll receipts have
actually fallen during fiscal 2010 (ends 9/30).
This is the dilemma facing the US economy. We are not creating enough
new jobs. Based on history one could expect that job creation is not
far off. But 2011 is unlikely to look like the past. I can’t think of a
single economist or government-forecasting agency that believes we will
see any significant job growth over the next twelve months. There is a
very real (and growing) potential that we will actually see more net job
losses.
The SS Trust Fund does not share this outlook on job growth. They think
things are about to ramp up in a very big way. The following graph
updates the prior one and shows a line in green that represents the
Fund’s expectation for payroll tax receipts for 2011. They are expecting
a YoY rise of $60b. This comes to an increase of 9%. That percentage
increase has not been achieved in any year for the past 20 years. A
slide using the projected data for 2011 from the SSTF 2010 Annual Report
to Congress:
The data table from the 2010 SSTF report:
SS payroll tax is 12.4%. Therefore the $60b increase in 2011 receipts
translates into $485b of increased total payroll. The question is how
many jobs will this convert into. The answer is dependent on the average
salary that all of the new workers will get. Average income in the US
is $35,000 today. Using this number you back into the new jobs for the
period 10/1/2010 to 9/30/2011 implied in the SSTF forecast is 13.8mm or
about 1.1mm net new jobs a month.
The Trust Fund Report to Congress gave an overall rosy view of the
future. By their calculation the net health of the Fund improved from
2009 to 2010. To arrive at that conclusion they relied on the recently
passed health care legislation and a set of economic assumptions that
are overly optimistic.
The TF is looked at under a 75-year microscope. I can’t look beyond a
few months with any confidence. I don’t understand actuarial science. It
makes me dizzy. But I do know that if you trip up on the first year of
a 75-year compounded calculation the magnitude of the miss grows
exponentially over time. Small miss today, big headache 25 years from
now.
Should those jobs not appear as SS is anticipating and we find ourselves
in 12 months with no net new job growth it will translate into a miss
of $50b on the Fund's bottom line versus plan. The 2011 cash flow
deficit would therefore be approaching $100b. This shortfall would have
to be financed by Treasury. It would not increase total US debt, but it
would cause the Debt Held by the Public to increase dollar for
dollar (9% increase) with the SSTF shortfall. Just a bit more work for
Tim Geithner and the Federal Reserve. Should be no problem, at least for
a few more years.
SS hit a nexus point this past spring. It went cash flow negative at a
trajectory that made it impossible to avoid a YoY cash flow loss. The
first for the fund since Alan Greenspan “fixed” SS in 1983. The Fund
estimates that this is a temporary phenomenon; that we have many more
years of surpluses in front of us.
I don’t think those 14mm new jobs are going to be there over the next
year. I believe that the TF will suffer another big cash loss in fiscal
2011. I don’t think we will ever again have a true surplus at SS unless
they raise taxes and do it fast. That is not going to happen.
The Trust Fund did us a disservice by using an overly aggressive
forecast. The evidence is clear to me at this point. It will be a matter
of record in six months. So whom might you blame for this “blue skies”
view? I would start at the top and blame the Managing Trustee. Guess
who?
»
- advertisements -
There's lies, there's damn lies, and then there's government-generated statistics.
These whoppers are the holy trifecta - right up there with the Medicare trustees last week pledging that Obama HellCare will add "12-years" to the Medicare Trust Fund (whatever the hell that is). Yeah, that's about as believable as is this silliness.
Couple these rosy projections with this data point:
http://news.yahoo.com/s/ap/20100808/ap_on_re_us/us_social_security_early_retirees
The money quote:
Makes perfect sense... UE has run out, no one is going to hire anyone over 50. If you don't get in now, it's not going to exist anymore.
I'm sure that's already reflected in their demographic models, though.
Giving politicians access to Excel has been a mistake.
those paid to lie economist in the ssa are growing pinocchio's nose to look like john holmes' dick....one more convenient lie to cover up the inconvenient truth of bankruptcy....another wild eyed fabian dream falls under the weight politburo theft, graft, and banksterism...
DOW and SP500 weekly charts update :
http://stockmarket618.wordpress.com
In 2008 the boat was sincking pretty fast. Now it seems the boat still floats and we'll be able to once in the future reach the shores.
So, that is a recovery if you compare the 2008 situation and the present.
But without some serious drydock time and repairs, the boat won't win any races.
Race to the Bottom?
Thanks for this one, Bruce! You deserve a shout-out!
Slightly OT, but has a Federal budget even been passed for this fiscal year?
Surplus?
Means test, make 70 yo retirement age and decrease benefits.
The way things are going 99.9999% will pass the means test so they're gonna have to jack up that retirement age to 85 or so.
IIRC they pulled the deemed as passed trick on it.
Also curious that this year's annual report was released in August, when previous annual reports were released in March, April or May. I guess there's a story behind that as well.
http://keynesianfailure.wordpress.com/
Year over year profits turned positive in the first quarter of 2010. This signals that hiring will resume in the first quarter of 2011. As long as the profits remain greater than 3.5% higher year over year, hiring will continue.
The easy comparisons are over. When the profit improvements stall, so will the hiring, this time I expect the halt to happen quicker than the normal 4-5 quarters to materialize because everyone is on edge with future prospects.
And for most orginazations, the cash cushions are no longer there. Sure, some companies are sitting on vaults of cash. But the mom and pop businesses are not.
If those companies start hiring in early 2011 who says those new hires will be here in the states?
Recent articles have pointed out that companies are sitting on over 1 trillion in cash... and, wait for it... over 7 trillion in debt. Much of it new debt. The cash has been borrowed. The "heaps of cash" crap is a mirage. (And, no, I'm just too fatigued to look up the references.)
Good catch. I bet there's a story behind that one. I don't buy most of the top-down manipulated statistics conspiracy theories, but that 9% growth in 2011 had to be driven by a phone call from a higher-up who was unhappy with the initial, less fantastical forecast. And you're right that the big impact of the crazy forecast will be on the long-term solvency of Social Security. Looks like the White House wants to suppress the ugly truth about just how bad it's looking for future boomer retirees.
http://keynesianfailure.wordpress.com/
I see the two public trustees positions are 'vacant'. Is that significant? Certainly would boost my confidence is there were some members other than Obama appointees.
I think a portion of the increase stems from expiration of the payroll tax rebates [cuts, whatever you want to call them]. That being said, I think the assumptions are still overly optimistic.
Here is the explanation for a portion of the drop in revenues in 2010:
"an expected $25billion downward adjustment to 2010 income that corrects for excess payroll tax revenue credited to the Trust Funds in earlier years."
An expected downward adjustment? In earlier years? The Trust Fund did not account for $25B?
I am sure there are some reasons for the rise in YoY revenue. We shall see as the numbers come out.
Do you suspect that said reasons involve double-plus ungood Ministry of Truth-type reasons?
http://www.orwelltoday.com/truth.shtml
Party ownership of the print media
made it easy to manipulate public opinion,
and the film and radio carried the process further.
16. Ministry Of Truth (Lies)
The Ministry of Truth, Winston's place of work, contained, it was said, three thousand rooms above ground level, and corresponding ramifications below.
The Ministry of Truth concerned itself with Lies. Party ownership of the print media made it easy to manipulate public opinion, and the film and radio carried the process further.
The primary job of the Ministry of Truth was to supply the citizens of Oceania with newspapers, films, textbooks, telescreen programmes, plays, novels - with every conceivable kind of information, instruction, or entertainment, from a statue to a slogan, from a lyric poem to a biological treatise, and from a child's spelling-book to a Newspeak dictionary.
Winston worked in the RECORDS DEPARTMENT (a single branch of the Ministry of Truth) editing and writing for The Times. He dictated into a machine called a speakwrite. Winston would receive articles or news-items which for one reason or another it was thought necessary to alter, or, in Newspeak, rectify. If, for example, the Ministry of Plenty forecast a surplus, and in reality the result was grossly less, Winston's job was to change previous versions so the old version would agree with the new one. This process of continuous alteration was applied not only to newspapers, but to books, periodicals, pamphlets, posters, leaflets, films, sound-tracks, cartoons, photographs - to every kind of literature or documentation which might conceivably hold any political or ideological significance.
Why not use pie in the sky numbers? Who will call them on it, CNBC? It will keep the cattle calm because the MSM will report that everything is fine, the report said so. Very few among the masses will even look at it.
Really appreciate your work chipping away at the SS Ponzi Bruce, keep it up!
And so we continue to spiral around the proverbial toilet bowl.
I'll have what these guys smoke. Got to be strong stuff grade-AAA quality.
No, no, no, you drop acid.
The more numbers and percentages that are presented, the more the underlying truth is missed.
This is NOT a recovery.
DavidC
The Keynesian swindlers have come to town promising an ability to weave astounding economic prosperity for the emperor... if they are provided with all manner of the finest and most costly materials. However, they announce that anyone who cannot see this nascent economic prosperity or the even greater things coming down the road are stupid or ill suited for their position.
Not wanting to appear foolish or exposed in these ways everyone surrounding the emperor pretends that they can indeed see magnificent things happening before their eyes and even more magnificent results just down the road...
I think the odds of us getting through all of this (SS, Medicare, Deficit, you name it) with our dollar intact are about 3 percent. The odds of us getting through it with our country are fifty fifty at best.
I believe the dollar could collapse at any instant. there are too many variables which are unstable. China could do it by itself if it wanted to. And why not? Cut bait and rebuild and show the Americans who is boss. It has a lot of long term benefits to the Chinese. They ween off of our debt and become a true power. It would really suck for us.
"The wall on which the prophets wrote is cracking at the seams.
Upon the instruments of Death, the sunlight brightly gleams.
When every man is torn apart with nightmares and with dreams,
will no one lay the laurel leaf when silence drowns the screams?
Confusion will be my epitaph, as I crawl a cracked and broken path -- if we
make it, we can all sit back and laugh -- but I fear tomorrow, I'll be crying."
-- King Crimson, Epitaph on "The Court of the Crimson King"
Dollar goes and the country goes. The dollar is our main export, how are we going ot pay for manufactured goods and energy? Manufacturing? Services? The magic printing press and financial fraud is what is holding up our standard of living after being hollowed out. There will be little social cohesion when the conspicuous consumption society can no longer afford energy and food much less a wealth of toys and gadgets. I harp on it but we face a culture crisis as well as an economic/currency crisis.
To hell with manufactured goods, they are mostly imported anyhow. And energy? I have 2 fireplaces, oak trees, and a garden.
I have gold, silver, seeds, some tools and food, and a can do attitude.
Will your wife let me move in? ;-D
You betcha. The plan is to settle on a few acres on the White River. Plenty of trout and very fertile land. You'd fit right in.
But Rocky girl, that is exactly the point. Manufacturing is the base of an economy. What the hell are service people going to service? We cannot take in each others laundry and the big Wallstreet service Casino is bereft of foolish retail customers.
And selling technology is a losers game.
Outsource Wallmart- that would be a good beginning.
Rocks ain't no girl. As a woman I am always interested that some men insult men by calling them women. If you don't like women, okay. But why hate that way?
I didn't take any offense at the chick reference. The poor Kayman girl has 40 ZH weeks under her belt, but obviously doesn't read my missives enough to know.
Ah yes, the worlds largest PONZI scheme. Remember how just weeks ago those in Greece protested over the rasing of retirement age and whatnot. They USA has raised the age a few times, no riots from the sheeple of course, so expect the retirement ago to collection SS to be raised a few times before those 40-ish actually retire. If any American here at the ago of 50 or below actually feel they will get back what they out in to SS they are dreamers. The PONZI scheme must continue unabated and without the chance of paying out more in a five year period than is being put into it.
I've often wondered how the Euros have such fire compared to us Americans? We largely share a common ancestry. Culturally we are descended from rebels, troublemakers, and others prone to immigration, and yet we are among the most passive group in the world. Even the Chinese riot routinely. I will also point out we are about the best armed nation, but still the most passive. Personally I have don't think it' purely a cultural change (especially with a culture of violence), which leaves only chilling possibilities.
Re: which leaves only chilling possibilities
(It doesn't have anything to do with fat)
It does have to do with how the peasants here (vs. there) view those-in-authority in their society. Americans believe pretty much in anything, but mostly they believe in the wisdom of "their" nation. European peasants were slaughtering each other just 60 years ago. Europeans don't believe in the wisdom of anything. And, don't forget - each European country is a separate culture that distrusts the other cultures (with very long histories of distrust). This suspicion protects Europeans from having a monolithic centralized government, which the US has in DC. The EU nobility is trying to centralize power in Brussels, but they are no-where near having the corporate-socialist (aka fascist) centralized government that exists in the US.
Despite what Americans say about big-government most believe in bigness. The only problem Americans have is what kind of of big government they want. The fascists (aka conservatives, Republicans) want a mean kick-ass daddy big-government. The fascist childlike peasants know that the very wise leaders of the Red Team could lead this great and glorious nation to ever more bigness and greatness if ONLY the Blue Team didn't stand in their way. The socialists (aka liberals, progressives, Democrats) want a guilt-ridden smothering mommy big-government. The socialist childlike peasants know that the very wise leaders of the Blue Team could lead this great and glorious nation to ever more bigness and greatness if ONLY the Red Team didn't stand in their way. The peasants believe the same bullshit story, but with different heroes (leaders).
The American childlike peasants are united in their desire for bigness and greatness. The sociopaths that actually run our one Party state (the Republicrat Party - Red and Blue Teams) are, of course, more than happy to feed the peasant children stories (bullshit) of the possible future national greatness which will be possible ONLY if the peasants keep voting for the Republicrats.
Different clowns, same circus - all for the manipulation of the childlike American peasantry.
Very few believe in the European Union. Most countries were suckered in after a second round of voting (Initially by the right wing and liberals, then the socialist weren't late to join the fray once they realized they could gain power on a continental level)... Another difference between the U.S. and Europe is that the people of the United States were forced to get along whether, catholic, jewish, protestant etc. As to the two party system you guys complain about. Certain countries in Europe has been socialistic for the majority of the last 50 years, and even if there's several parties, usually parties block together to form what in reality is a two party system. US/EU, nowadays, seems to be the same shit. I don't get warm and cozy about the enterprise and great capitalistic system of United States cause it doesn't seem to be a lot better over there. As a european, I can only say, welcome to the welfare state my american brothers and sisters.
Have you looked around at a mall lately? What do you see?
Answer: FAT
Sorry if I offended any readers, but you know who you are.
http://tinyurl.com/22od2tz
Guilty as charged, RR! I've been trying to shake the 50-pounds I put-on once I got out of the Army for the better part of 15-years. Too much food, too much free time, like to eat too damn much. And all of it is crap. Problem is, I'm hooked. Almost too late for me (I'm 44, 6'2", topping in at about 270 - yikes, I know). Trying to keep my kids from falling into the same trap. Probably the best I can do.
We have the fattest poor people on the planet. Don't believe me? Take a ride through any major American welfare center. Fat kids, fat parents. Too much crap food, too much free time. All adds up to Hey Hey Hey, it's Fat Americans.
Now throw-in a little complacency and general laziness, stir, simmer for a couple of hours, and we're ripe for the slaughter.
First pic is true. I got back from Latvia and I was stunned by how thin and attractive the girls were. Nice to, willing to talk to this dumb American.
Though in all truth I'm carrying around a few to many pounds, so I can't throw to many stones. I packed on a lot of stress weight first year in grad school (Pizza is the devil) but I've lost most of it and on track to get the rest off it before I graduate.
I'm 62 years old and weight in at 150 even. It is very easy to pack on the flab, but it's mostly attitude that helps. I just want to live long enough to see the biggest turd of all hit the fan -- and I'll die happy.
Interesting, as i know the plane landed in the USA when after a trip abroad to various countries that within the airport suddenly there are a lot of overweight people (as compared to where the plane launched from outside of USA).
A recent poll (University of Michigan??) showed a majority of folks over 40 do not believe they will collect anything from SS when their time comes. I was one of those.
So if that poll is to be trusted, some of the sheeple are awaking. But if you asked me twenty years ago if I thought I would get anything from SS, I would have told you the same thing, NO. At the same time, I and my wife have been unable to save a vast sum, as everytime we get something put away, we get layed off. Its happened so many times its pathetic. I was out of work for 11 months the last time, from Jan. 09 to Nov. 09. During that time my wife was layed off from Nov. 08 to May 09. Everything we had in the bank went to keep from losing anything.
And whether you choose to believe it or not, we both were looking for work on a daily basis. And I cannot recall a time when I applied for so many jobs, without getting a response back at all. And when I did get an interview, it was for one job opening, and there would be 20 or more people there for that one job.
So now its back to square one. Now this time we both work at Tinker AFB as Sheet Metal Mechanics. Of all the jobs we applied for, these were the only ones that worked out. We both had many years of previous experience in this field, so I guess it should not be surprising. Its just sad that the only work available in that field was working for the government. Between the two of us we will make about 94,000. Once we finally get done some of the catching up to do as far as home maintenance, we'll start trying to save again. Were both on FERS, but I am not anymore sure about that than I am SS. ;-(
Tell a small lie no one cares. Tell a big enough lie - everyone believes (well, not everyone, but close to everyone).
Time to get rid of ALL government pensions and put ALL government workers, including CONgress on SS and 401Ks.
It is probably also time to reduce the SS tax rate and make it payable at ALL income levels, not cut off once the threshold is reached.
Close, but no cigar. Get rid of it all. No taxation to support those who fail to save for their own retirement, period.
What is this thing, "retirement?"