The correct method to analyze SS updates

Since I criticize the Christina for get things backwards social security and gold inflows, perhaps I should explain the correct model.

If you want to analyze the affect of SS updates, then please determine the nominal update probability, and work from deviations to that. Here is what I mean. Congress looks over thirty year processes, and operates on a finite set of changes that can fit into the 30 year window. We know that because Congress does not offer a 40 year bond, but it offers a 30 year bond.

The computation of the most probable SS update is simple, 30 years is the working persons time constant of work and retirement, we alter our demographics at a 30 year rate. Using DGSE methods, on a 30 year schedule, how often should Congress update retirement programs? Simple, every 15 years, twice the bandwidth of the life cycle.

 This result falls out of DSGE analysis. When Congress is mostly accurate with 15 year updates to retirement programs, then there is no noticeable change in the stability of the programs, the DGSE analysis shows nothing out of balance, the updates should have no effect on GDP. But Congress does not meet the schedule, in fact no one operates for long on a regular schedule except slaves.

However, if Congress is reasonably correct on its update rate, then small, acceptable changes happen to SS, but SS remains within a fair error of stability. So we can see the research approach. When Congress is noticeably late in its update, the GDP gets out of balance, forcing Congress to address the issue. The multiplier appears to be greater than one, but what really happens is Congress has let the SS multiplier lapse, then realizing its predicament, makes a correction, which appears to Christina as a multiplier greater than one.  Really, it is a nominal multipler following years of multipliers less than one.

Consider California, someone told public sector unions that pension updates never need happen. Unions enforced that deal until California went bankrupt. Now that Brown is trying, and failing, to correct the stability problem with an update, his administration looks like good government. But that is relative to 20 years of bad government, bad government enforced mainly by UC Berkeley Keynesian professors.