TCS: Tech Central Station - Actuarially Unsound

Actuaries live in an “Alice In Wonderland” sort of world where fiction becomes reality and any rebuttal is sort of like debating the theoretical existence or non-existence of God. We will cross that bridge when we come to it.

Arnold King tries to explain two assumptions associated with Social Security and Private Accounts.

What Arnold does not do is to link the assumptions used for the stock market, bubble induced increases in value, to the present set of investments that are now tied to tax deferred retirement accounts, quite independent of the SS discussion. If the assumed returns from further bubbling of stock valuations is no greater than 6.5% then the assumptions underlying Pension Obligation Bonds are also out of whack. They typically assume 8 or even 8.5 percent as justification, for the propriety of local and state government borrowing, to invest in the stock market pyramid. This is all dreamland stuff – or maybe even X-Files stuff in terms of proof or non-proof.

The drug of choice seems to be high-proof politics.