Economist Dean Baker, undeterred by Simpson's first round of insults against him, comes back with a budget quiz that Simpson, other members of the commission, and "reporters and editors at major news outlets may also want to review . . . since it seems that they could also use some additional background knowledge on the program."
The quiz is made much simpler by the fact that Baker provides the answers.* The point is, these are basic issues relating to Social Security that anyone writing about the issue, or particularly making decisions about the future of Social Security should have a solid grasp on. That is, if they're actually dealing with the reality of Social Security.
- How much higher are real wages projected to be in 2040 than today? In other words, how much richer do we expect the average worker to be 30 years from now?
- How did the 2010 Trustees Report change the projections for 2040 wages compared with the 2009 report?
- If we solve the projected shortfall in Social Security entirely by raising the payroll tax, what percent of the gain in real wages over the next 30 years would have to go to pay the tax?
- What percent of real wage gains over the last 30 years was absorbed by the increase in Social Security payroll taxes?
- What percent of the projected long-term budget shortfall is due to the inefficiencies of the US health care system?
- How much wealth should we expect near retirees to have to support themselves in retirement?
- What percent of older workers have jobs in which they can reasonably be expected to work at into their late 60s?
*Baker's answers are below.
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