Fiscal policy wonks have been in a tizzy for the past month over a bombshell paper [PDF] by Hoover Institution economist Michael Boskin. Boskin argues that projections of massive deficits in the future are exaggerated, because they fail to account for the "hidden pot of gold" that will appear as people begin cashing out tax-deferred retirement accounts. On his account, Social Security and Medicare, while still structurally unsound, will be able to survive on life support for longer than had previously been thought.
Not so fast, say a trio of Brookings scholars: the "hidden pot of gold" turns out to be more like some loose change we'll find in the couch, since most of that future revenue is already captured in deficit projections. Of course, even if the Brookings crew is right, we can expect members of Congress to make plenty of noise about the Boskin paper in an attempt to stave off pressure for greater fiscal discipline.