Fiscal and Generational Imbalances New Budget Measures for New Budget Priorities

by Gokhale, Jagadeesh; Smetters, Kent

• ISBN13: 9780844771670
• ISBN10: 0844771678
• Format: Paperback
• Copyright: 2003-01-01
• Publisher: Aei Press

Summary

Few realize how bad the federal government's finances are, because most evaluations are based on what happened in the past--not what is likely to happen in the future.

Author Biography

Kent Smetters is an assistant professor at the University of Pennsylvania.

Table of Contents

Foreword	p. v
Acknowledgments	p. ix
Introduction	p. 1
The Fiscal Imbalance Measure	p. 7
The Generational Imbalance Measure	p. 10
The Desirable Properties of a Fiscal Measure	p. 16
The Bias in Policymaking Arising from Current Budget Accounting	p. 21
Estimates of Federal Fiscal and Generational Imbalances in the United States	p. 23
Total Federal Fiscal Imbalance	p. 25
Social Security	p. 25
Medicare	p. 29
The Rest of the Federal Government	p. 30
Evaluating the Size of Federal Fiscal Imbalance	p. 31
Comparison with Official Estimates	p. 31
Comparison of FI with Present Values of Payroll, GDP, and Other Aggregates	p. 33
Sensuivity to Alternative Assumptions	p. 35
Conclusion	p. 42
The Fiscal and Generational Imbalance Measures	p. 44
Derivation of the Infinite Horizon Fiscal Imbalance Measure	p. 44
Generational Imbalance	p. 45
Assumptions and Methods for Estimating Fiscal Imbalances for Social Security, Medicare, and the Rest of the Federal Budget	p. 48
Method for Extending the Social Security Administration's Population Projections	p. 48
Method for Projecting Social Security Revenues and Benefits	p. 49
Methodology for Projecting Medicare Revenues and Outlays	p. 52
Estimating Fiscal Imbalance for the Rest of the Federal Government	p. 53
Distributing and Projecting Federal Outlays	p. 53
Distributing and Projecting Federal Revenues	p. 54
Estimating Consumption Profiles by Age and Sex	p. 56
Methodology for Extending SSA's Population Projections	p. 57
Population Projections	p. 57
Assumptions and Definitions	p. 59
Methodology for Projecting Social Security Age-Sex Benefit Profiles	p. 60
Calculating and Projecting Social Security Taxes and Benefits per Capita	p. 66
Derivation of Age-Sex Profiles for Medicare Revenues and Outlays	p. 68
Notes	p. 73
References	p. 79
About the Authors	p. 83
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