Saturday, April 02, 2005

CBO's Social Security Report

This is the report on Social Security> by the Congressional Budget Office. It uses assumptions that are a little more positive and probably more realistic than does the recent report from the Social Security actuaries.

Keep always in mind that what the various reports do is provide a projection of future revenues and benefits, not a forecast. The distinction is very important. A projection is extremely dependent on the size of the various assumptions that go into it. A forecast is expected to be accurate. A projection is known to be more and more inaccurate the further into the future it goes because there is no way of projecting the behavior of the assumptions accurately.

So a projection is not a forecast or a prediction for the distant future. At best it is a warning of what might happen. It can only be expected to be somewhat accurate in the near future.

With this in mind, go look at the CBO's effort here.


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