Reply #48: Why the rapid lower mortality assumptions? [View All]

[papau]

http://www.prospect.org/weblog/archives/2005/03/index.html#005852

DEATH DECLINE: WHY? The new report is out http://www.socialsecurity.gov/OACT/TR/TR05/index.html and the moment of Trust Fund Doom has been moved forward from 2042 to 2041. Propaganda coup for the privateers!
Why the change? I can't say in full detail at the moment, but here's one switch in the assumptions I noted immediately as I started clicking around. Last year's death rate assumptions http://www.ssa.gov/OACT/TR/TR04/V_demographic.html#wp159501 projected 858.4 deaths per 100,000 in 2005, 831.0 in 2010, 798.9 in 2015, 766.8 in 2020, and so on, declining forever. For Social Security, lower death rates mean tougher budgets. There was already good reason to believe that this was too sharp a decline, yet the new report http://www.socialsecurity.gov/OACT/TR/TR05/V_demographic.html#wp159501 just gets more pessimistic (from that actuarial viewpoint).

Now they've got 854.2 deaths per 100,000 in 2005, 828.2 in 2010, 796.7 in 2015, and 764.7 in 2020. By 2080, in the new projection, we'll be all the way down to 495.5 per 100,000 while last year's projection had us at 497.2. The text explains mysteriously that "a revision in the method of calculating death rates for ages 65-69" is responsible for the change. Given an administration known for its commitment to accuracy in factual statements and commitment to reality-based policy solutions, my assumption would be that these are good-faith (though perhaps mistaken) changes. Given the reality of the situation, I'm skeptical