The Social Security Administration projects that its trust funds will be depleted by 2033—not an optimistic forecast. But it may be even bleaker than that.
New studies from Harvard and Dartmouth researchers find that the SSA’s actuarial forecasts have been consistently overstating the financial health of the program’s trust funds since 2000.
“These biases are getting bigger and they are substantial,” said Gary King, co-author of the studies and director of Harvard’s Institute for Quantitative Social Science. “[Social Security] is going to be insolvent before everyone thinks.”
The Social Security and Medicare Trustees’ 2014 report to Congress last year found trust fund reserves for both its combined retirement and disability programs will grow until 2019. Program costs are projected to exceed income in 2020 and the trust funds will be depleted by 2033 if Congress doesn’t act. Once the trust funds are drained, annual revenues from payroll tax would be projected to cover only three-quarters of scheduled Social Security benefits through 2088.
Researchers examined forecasts published in the annual trustees’ reports from 1978, when the reports began to consistently disclose projected financial indicators, until 2013. Then, they compared the forecasts the agency made on such variables as mortality and labor force participation rates to the actual observed data. Forecasts from trustees reports from 1978 to 2000 were roughly unbiased, researchers found. In that time, the administration made overestimates and underestimates, but the forecast errors appeared to be random in their direction.
By David Boaz
This article appeared in TownHall.com on May 8, 2015.
Today is the 116th anniversary of the birth of F. A. Hayek, one of the greatest scholars of the 20th century.
Back in 2010, as the tea party movement was on the verge of delivering an electoral rebuke to President Obama’s big-government policies, the New York Times derided the movement for reviving “long-dormant ideas [found in] once-obscure texts by dead writers.” They meant Hayek especially. But a more astute journalist might not have regarded Hayek as obscure.
Who was Hayek? He was an economist born and educated in Vienna. After the Nazi conquest of Austria, he became a British citizen and taught there and at the University of Chicago for most of his career. He was awarded the Nobel Prize in Economics in 1974. President Ronald Reagan called him one of the two or three people who had most influenced him, and so did some of the dissidents behind the Iron Curtain. President George H. W. Bush awarded him the Medal of Freedom. Margaret Thatcher banged his great book “The Constitution of Liberty” on the table at Conservative Party headquarters and declared “This is what we believe.” Milton Friedman described him as “the most important social thinker of the 20th century.”
“Today is the 116th anniversary of the birth of F. A. Hayek, one of the greatest scholars of the 20th century.”
But respect for Hayek extended far beyond libertarians and conservatives. Lawrence H. Summers, former president of Harvard and a top economic adviser to Presidents Clinton and Obama, called him the author of “the single most important thing to learn from an economics course today” — that markets mostly work without plans or direction. He is the hero of “The Commanding Heights,” the book and PBS series on the battle of economic ideas in the 20th century. His most popular book, “The Road to Serfdom,” has never gone out of print and saw its sales explode during the financial crisis and Wall Street bailouts. John Cassidy wrote in the New Yorker that “on the biggest issue of all, the vitality of capitalism, he was vindicated to such an extent that it is hardly an exaggeration to refer to the 20th century as the Hayek century.”
In much of his work Hayek explored how society can best make use of “the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.”
When we see an orderly process, we naturally assume that someone has designed or planned it. Hayek says that we fail to distinguish between two kinds of orders: the “made” or planned order, such as a business firm or other limited organization, and the “grown” or spontaneous order, such as the whole society or market process. It is crucial to make this distinction, however, because the two kinds of orders are very different. Notably, the made order is designed for a specific purpose, while the grown order reflects the different and often competing purposes of many individuals and enterprises.
Hayek’s last book, The Fatal Conceit, published in 1988 when he was approaching ninety, returned to the topic of the spontaneous order, which is “of human action but not of human design.” The fatal conceit of intellectuals, he said, is to think that smart people can design an economy or a society better than the apparently chaotic interactions of millions of people. Such intellectuals fail to realize how much they don’t know or how a market makes use of all the localized knowledge each of us possesses.
The failure to absorb that lesson leads to many of our modern policy problems, from the financial crisis to the inner-city chaos wrought by the war on drugs to the failed attempt to use the U.S. military to “build nations” overseas.
Reagan and Thatcher admired Hayek, but he always insisted that he was a liberal in the classical sense, not a conservative. The last chapter of “The Constitution of Liberty” was titled “Why I Am Not a Conservative.” He pointed out that the conservative “has no political principles which enable him to work with people whose moral values differ from his own for a political order in which both can obey their convictions. It is the recognition of such principles that permits the coexistence of different sets of values that makes it possible to build a peaceful society with a minimum of force. The acceptance of such principles means that we agree to tolerate much that we dislike.” He wanted to be part of “the party of life, the party that favors free growth and spontaneous evolution.” I recall an interview in a French magazine in the 1980s in which he was asked if he was part of the “new right,” and he quipped, “Je suis agnostique et divorcé.” (“I am agnostic and divorced.”)
Hayek was more than just an economist. He also published impressive works on political theory, psychology, and the methodology of the social sciences.
Ridgewood Health Department : Free Dog Rabies Clinic and Dog License Informaton – May 13
FREE DOG RABIES CLINIC AND DOG LICENSE INFORMATION
The Ridgewood Health Department would like to remind residents of the annual FREE dog rabies clinic on Wednesday, May 13, 2015 from 6pm until 7 pm at the Recycling Center on Glen Avenue. All dogs must be accompanied by an adult and leashed or contained in a carrying case.
2015 dog license renewals are due during the month of June. A $20 late fee will be charged for all renewals received after June 30, 2015.
The health department will be sending renewals via email. If you do not have an email address please call our office and request a renewal to be mailed to you. Renewal applications may also be obtained by visiting our website at www.ridgewoodnj.net or coming in person to the Ridgewood Health Department, 131 North Maple Ave. The office hours are Monday to Friday from 8:30 am until 4:30 pm. Please call 201 670-5500 ext. 503 with questions.
New Jersey law requires owners of all dogs seven months of age or older to be registered with the town they live in. In order for the license to be issued, the owner must present proof that a licensed veterinarian has vaccinated the dog against rabies and that the duration of immunity from that vaccination does not expire before May 1, 2016. To receive the discount for a spayed or neutered pet, proof must also be provided.
In conjunction with the rabies clinic, the Responsible Pet Ownership Committee will also be facilitating free micro-chip implantations and registration to the first 75 dogs at the clinic. Please direct any questions regarding the micro-chipping to Jeffrey Ball at [email protected]
MAY 8, 2015 LAST UPDATED: FRIDAY, MAY 8, 2015, 12:31 AM
THE RIDGEWOOD NEWS
There’s good reason to opt out
To the editor:
On April 2, all district parents received from our Superintendent of Schools a status update on the first round of Partnership for Assessment of Readiness for College and Career (PARCC) testing.
The letter tallies the students whose parents refused the PARCC tests (opting out is not technically an option): 1,135 out of a total of 4,111 students, or nearly 28 percent. The refusal rate for grades 3-8 was over 11 percent.
In line with NJ Education Commissioner David Hespe’s recent threats, the letter states that Ridgewood Public Schools may suffer ill effects as a result, including losing federal grant money and losing our status as a high-performing school district.
The letter does not mention that no district has ever lost federal grant money as a result of low participation, nor does it question why a brand-new assessment should carry such weight in terms of evaluating our district’s schools.
I, along with no doubt all Ridgewood residents who are shouldering 95 percent of the $101 million school budget via property taxes, wish to maintain Ridgewood’s status as a high-performing district. I do not think that the way to do this is to sit by as corporate-led reform, the stated goal of which was to create a “national uniform market” for standardized tests and prep materials, attempts to convert our public schools into profitable test factories without corresponding benefit to students.
We’ve always had standardized tests. However, the low-stakes, sporadic CAT and Terra Nova tests took up a fraction of instruction time as compared to the high stakes, annual standardized testing that began in 2001 with NJ ASK under NCLB.
PARCC and PARCC test prep take excessive standardized testing to a new level.
Further, like other standardized test results, PARCC scores will not tell teachers what they don’t already know. The delay in receiving them exacerbates this: Results from the March testing won’t be out until October 2015 at the earliest. Relying on such data for student placement or special needs or anything else seems more than a bit delayed.
The bottom line is, as Dr. Fishbein stated in an op-ed piece last summer, ever-increasing state mandates including PARCC are objectionable because they displace instruction time and shunt teachers into offices and behind desks to fill out reports and pore over data.
Many parents agree and are acting, in a lawful and respectful way, to try to roll back the intrusion of corporate “reformers” and politicians under their influence in the classroom.
I understand that Commissioner Hespe has directed administrators to encourage participation in PARCC. The Department will view such attempts as a “mitigating factor” in how districts with high non-participation rates are evaluated, as Commissioner Hespe stated at an April 29 hearing in Trenton.
At the same hearing, the Commissioner claimed not to understand why parents are refusing permission. Rather than merely carrying out the Commissioner’s directives, our administration would serve us well by helping to explain that to him and the Department publicly.
MAY 7, 2015 LAST UPDATED: THURSDAY, MAY 7, 2015, 2:52 PM
BY MARK KRULISH
STAFF WRITER |
THE RIDGEWOOD NEWS
Ridgewood residents and Planning Board members questioned Village Planner Blais Brancheau on the latest changes to the amendment to the land use element of the master plan as multifamily housing hearings resumed Tuesday night.
Two weeks ago, Brancheau presented a reworked recommendation to the board for its consideration, which featured reductions in density, height and floor area ratio along with some zoning tweaks.
All three zones now feature a maximum height of 50 feet and a density of 30-35 units per acre. Floor area ratios were reduced by 20 percent in the AH-2 zone and 10 percent for the B-3-R and C-R zones since the latter two allow mixed-use, but not purely commercial, development.
The C-R zone was also reduced in size as the West Bergen Mental Healthcare building and its adjacent properties were returned to the C zone. The southern end of the originally proposed C-R zone, which includes the Ken Smith property, was moved into the B-3-R zone.
File this one in the category of “do as we say, not as we do.”
The Internal Revenue Service over one decade tolerated “willful tax noncompliance” from 1,589 employees without consistent or clear procedures for addressing individual cases, according to a report released Wednesday by the Treasury Inspector General for Tax Administration.
In 60 percent of the cases, the watchdog found, the tax agency mitigated proposed terminations of employees found to have committed, as defined by regulation, a “voluntary intentional violation of a known legal duty (timely filing of a tax return or accurate reporting of a tax obligation) for which there is no reasonable cause.” Instead of being fired, the employees received lesser penalties such as suspensions, reprimands, or counseling.
“Given its critical role in federal tax administration, the IRS must ensure that its employees comply with the tax law in order to maintain the public’s confidence,” TIGTA J. Russell George said. “Willful violation of the law by IRS employees should not be taken lightly, and the IRS commissioner should fully document decisions made to retain employees whom management has proposed be terminated.”
The study of employee disciplinary cases from fiscal 2004-13 found that only 620 employees (39 percent) of those committing willful tax noncompliance were terminated, resigned or retired. In some case, TIGTA said, employees with similar violations received different discipline. And among cases that were mitigated, files included mitigating factors as well as evidence that violations of tax law were willful, but the documents did not make clear the basis for the commissioner’s decisions to mitigate.
MAY 6, 2015, 7:06 PM LAST UPDATED: WEDNESDAY, MAY 6, 2015, 7:06 PM
BY CHRIS HARRIS
STAFF WRITER |
THE RECORD
RIDGEWOOD — The executive director of an affordable housing agency has endorsed a proposed master plan amendment that, if approved, would clear the way for high-density, multifamily housing developments downtown.
A letter dated April 29 from lawyer Kevin Walsh from the Fair Share Housing Center, urges Ridgewood’s Planning Board to adopt the amendment, which has been under consideration for years.
The letter was read at the Planning Board’s meeting Tuesday night.
Adopting the master plan change “will assist the municipality in meeting its very substantial unmet affordable housing obligations,” which Walsh put at more than 1,000 units.
Four developers with plans for four different housing complexes initially requested the master plan amendment five years ago. Since then, one of the developers has backed out.
The three remaining developers have plans to construct a combined 208 apartments downtown.
The developments proposed are The Dayton, a 106-unit luxury garden apartment complex at the site of the former Brogan Cadillac dealership; the 50-unit Chestnut Village, which would be on Chestnut Street, and the 52-unit Enclave, proposed for East Ridgewood and North Maple avenues.
Citing the Supreme Court’s March 10 decision, Walsh’s letter contends there is a “renewed focus on ensuring that municipalities meet their obligations in an expeditious fashion.”
Ridgewood NJ, The Ridgewood Friends of Music is hosting The Korean Traditional Dance of Choomnoori’s performance, “Korean Traditional Dance and Music Night”, on Saturday, May 9th, at 7:00 pm, at Benjamin Franklin Middle School. This event showcases Korean performing arts, and includes traditional musical instruments, dance, martial arts and costumes, in celebration of Asian-Pacific Heritage Month. The event will also feature Ridgewood music students, the Washington Sorichung, and Jang Star Taekwondo. This event is suitable for children. Tickets are $10. Contact Kristen at [email protected], or purchase at the door.
Ridgewood NJ, The Ridgewood Police Department is pleased to announce the 2nd annual Chief Michael Feeney, Jr. Police Academy scheduled from Monday June 22nd 2015 to Tuesday June30th. The academy is open to Ridgewood Residents entering 6th 7th and 8th grades in the fall of 2015.This year’s academy will feature demonstrations from The Ridgewood Police Department, Bergen County Sheriff’s Department K-9 and Bomb Squad, Police Motorcycles, Ridgewood Emergency Services, Ridgewood Fire Department a Helicopter landing as well as demonstrations from various other agencies. A field trip to the Bergen County Law and Public Safety Complex in Mahwah is scheduled for Wednesday June 24th. This year we added a trip to see a Jackals baseball game at Montclair State University on Wednesday July 1st 2015 the day after the academy graduation, attendance is optional. The cadets will also be asked to March in the Ridgewood 4th of July Parade. Applications are available at the Ridgewood Police Station 2nd floor police desk. The deadline for applications is Monday June 1st 2015. The fee for the Academy is $40 per student which includes two shirts per student a baseball hat a water bottle and transportation to our field trip. There is an additional $18 per student fee if they will be attending the Jackals Game Wednesday July 1st.
The Junior Police Academy has proven to be a valuable experience for all involved and has provided a vital link between the Police Department and the youth of Ridgewood. Further, the Junior Police Academy has afforded students a deeper understanding of the Police function as well as an increased ability to see what the Police and the community can do to serve the Village. The overwhelming success of our first Junior Police Academy class has far exceeded the expectations of everyone involved. This program attracts a highly motivated group of recruits, and the Instructors thoroughly enjoy their interaction with these young people. We look forward to another great class.
Evaporating liquidity and higher US interest rates will cause huge market swings with potentially catastrophic consequences, Institute of International Finance warns
By Szu Ping Chan
6:41PM BST 04 May 2015
Investors face a “painful” adjustment in a world of evaporating liquidity and higher US interest rates that will trigger huge market swings with potentially catastrophic consequences, the Institute of International Finance has warned.
Timothy Adams, the chief executive of the IIF, which represents the world’s biggest banks, described liquidity as the “top issue” at high level meetings of central bankers, chief executives and other financial institutions.
He warned that the raft of regulation introduced in the wake of the 2008 crisis could potentially cause market gyrations larger than last October’s “flash crash” in US Treasuries.
While Mr Adams supports tougher rules that have made the banks more resilient, he said a complex web of regulatory reform may have left banks less able to respond to the next crisis.
“There’s just less capacity for making markets,” he said. “Officials will say: we expect some volatility and this was part of this broader scheme of regulatory reform. But for the private sector there is this issue of: is the total effect of all of these various regulatory changes likely to produce outcomes larger than each individual regulatory reform and its consequences?
“The cumulative unintended could end up being much larger than the one-off intended – we just don’t know.”
A new Federal Emergency Management Agency policy requiring states to address climate change before they can become eligible for grant funding is drawing fire from congressional Republicans.
The regulations, part of a FEMA State Mitigation Plan Review Guide issued last month, are not set to take effect until next March. But lawmakers are demanding an explanation for the rules now.
In a letter to FEMA Administrator W. Craig Fugate, the lawmakers said they’re concerned that the agency’s decision will create unnecessary red tape in the disaster preparedness process.
“As you know, disaster mitigation grants are awarded to state and local governments after a presidential major disaster declaration,” they wrote. “These funds are crucial in helping disaster-stricken communities prepare for future emergencies.”
The letter was signed by Sens. Jim Inhofe (R-Okla.), David Vitter (R-La.), John Barrasso (R-Wyo.), Thad Cochran (R-Miss.), Deb Fischer (R-Neb.), Bill Cassidy (R-La.) and James Lankford (R-Okla.).
In the revised guide, the agency said mitigation planning regulation requires consideration of the probability of future hazards and events to reduce risks and potential dangers.
“Past occurrences are important to a factual basis of hazard risk, however, the challenges posed by climate change, such as more intense storms, frequent heavy precipitation, heat waves, drought, extreme flooding and higher sea levels, could significantly alter the types and magnitudes of hazards impacting states in the future,” FEMA said in its guide.
But in their letter, the senators said climate change is still being debated, citing “gaps in the scientific understanding around climate change.”
Congratulations to Nicole Eskow, a student at Bergen County Academies, on being named an Intel Science Talent Search finalist. During a recent visit to my office, Nicole explained her cancer research that earned her this prestigious recognition. Keep up the great work!
May 4, 2015
WASHINGTON, D.C. – U.S. Representatives Scott Garrett (R-N.J.), Chairman of the House Financial Services Capital Markets and Government Sponsored Enterprises Subcommittee, and Carolyn Maloney (D-N.Y.), Ranking Member of the Subcommittee on Capital Markets and Government Sponsored Enterprises, today introduced H.R. 1982, the Restoring Main Street Investor Protection and Confidence Act of 2015.
H.R. 1982 would reaffirm and clarify key protections for ordinary investors that were put in place when Congress passed and amended the Securities Investor Protection Act (SIPA). In particular, the bill aims to properly shield innocent individual investors who have already been defrauded and financially devastated by Ponzi schemes perpetrated by Bernie Madoff, Allen Stanford, and others from further “clawbacks” by the Securities Investor Protection Corporation (SIPC) Trustee.
“This bill is about creating confidence in our markets and protecting innocent investors—investors with their life savings on the line—from abuse, and malfeasance,” said Garrett. “If Americans lose faith in our securities markets, and the government agencies that give them their seal of approval, it could have a devastating impact on our capital markets and our economy. If enacted, this legislation will bring confidence back to Main Street investors by ensuring fairness for victims, enhancing efficient functioning of U.S. securities markets, and strengthening the oversight and accountability of the Securities Investor Protection Corporation (SIPC).”
“The last thing a defrauded investor needs is an additional shakedown from the Securities Investor Protection Corporation,” said Maloney. “This important legislation would shield mom and pop investors from these so-called clawbacks, and ensure we go after the criminals, not the victims. It’s a pleasure to work with Representative Garrett on this important legislation.”
MAY 4, 2015, 7:07 PM LAST UPDATED: MONDAY, MAY 4, 2015, 7:07 PM
BY JOHN C. ENSSLIN
STAFF WRITER |
THE RECORD
A communications mix-up Monday led the Bergen County Freeholders to postpone action on a proposed $3-million bond issue to renovate a building at Bergen Community College.
Three freeholders who serve on the Board of School Estimate were about to discuss the measure when County Administrator Dominic Novelli said he had not seen the proposal.
There was also concern over whether adequate notice was given for the vote, which several freeholders said took them by surprise as well.
“The conclusion that we came to is that the meeting was not properly noticed,” Freeholder David Ganz said after the Board of School Estimate voted to adjourn until an unspecified date.
“You don’t want — with the dollars amounts what they are — to make a mistake,” he added.
College officials had sought approval for $3 million for renovating Ender Hall on the Paramus campus.
They also sought $1.5 million toward upgrade of information technology equipment.
College President B. Kaye Walter explained that Ender Hall started out as a temporary building many years ago.
She said there are plans to use the building for a number of new initiatives, including a pre-college program for high school students studying engineering.
At first, freeholders sought to accommodate the request, which came during a budget hearing for the college.
Ganz and Freeholder Joan Voss convened a meeting of the board of estimate, which normally includes three freeholders and two college trustees.
They even temporarily swore in Freeholder Tracy Zur to fill in for Freeholder Steve Tanelli, who was not present.
But they quickly recessed the meeting after Novelli pointed out that the administration had not approved the spending.
“Quite frankly, I’m not familiar with this request for additional funding,” he said.
MAY 4, 2015, 5:37 PM LAST UPDATED: MONDAY, MAY 4, 2015, 5:39 PM
BY HERB JACKSON
WASHINGTON CORRESPONDENT |
THE RECORD
Top veterans of the Clinton and Obama administrations are lining up to help raise money for Josh Gottheimer of Wyckoff, a former speech writer for President Clinton who is preparing to run for Congress next year against Rep. Scott Garrett.
Gottheimer, 40, raised more than $219,000 in March and was set to add to that on Monday night at a fund-raiser at the Washington, D.C., home in of Patti Solis Doyle, a former adviser to then-first lady Hillary Clinton and to President Obama’s campaigns in 2008 and 2012.
Other names among the 28 hosts for the fund-raiser include Mack McLarty, who was President Clinton’s chief of staff; Julius Genachowski, former chairman of the Federal Communications Commission; Sandy Berger, former national security adviser to Clinton; Paul Begala, Clinton political strategist and media commentator; and Jennifer Palmieri, communications director of Hillary Clinton’s 2016 campaign.
The outpouring of support for a challenger is unprecedented this early in the campaign cycle in the Republican-leaning 5th District, a place Democrats in North Jersey have repeatedly said they could win if a candidate could raise enough money to define Garrett on New York television.
Gottheimer is a North Caldwell native who moved back to North Jersey with his family three years ago. A corporate strategist for Microsoft, he previously worked for the FCC and on the presidential campaigns of John Kerry in 2004 and Hillary Clinton in 2008.
MAY 4, 2015 LAST UPDATED: MONDAY, MAY 4, 2015, 9:59 AM
BY DARIUS AMOS
STAFF WRITER |
THE RIDGEWOOD NEWS
Ridgewood school board trustees approved the 2015-16 budget without objection, but their vote last Monday night didn’t go unnoticed.
Nearly 80 parents and teachers crammed inside the Education Center, where two dozen of the attendees appealed to the board for reconsideration of several staffing decisions proposed for the upcoming academic year. Each of them claimed that rising student enrollment numbers without an accompanying increase in class sections would hinder the educational experience for their students.
In a brief budget presentation to the board and public, Alfredo Aguilar, the schools’ business administrator, pointed to various budget highlights, including $1.5 million in technology upgrades and a new generator for the Education Center. He also noted the budget was adjusted for “enrollment shifts between grade levels.”
One of those adjustments was the recent addition of kindergarten sections at two schools.
“There have been some concerns voiced in some of our sections in the elementary schools,” said BOE President Sheila Brogan. “Willard kindergarten [enrollment] is creeping up. That is an area of concern.”
