As a Senior Application Developer, Mari helps economists and analysts build programs to calculate and visualize results. Her current work focuses mainly on Social Security and past projects have included data interactives. She has worn a variety of hats at PWBM over the years including administrative, communications, and front-end. Mariko has a B.A. in Economics and a minor in Mathematics from Smith College and is currently pursuing a Master of Computer and Information Technology at the University of Pennsylvania.
The current Social Security program faces a significant shortfall, equal to 4.2 percent of all future covered payroll over the next 75 years. This shortfall persists under alternative and favorable projections of fertility, interest rates, immigration and the projected impact of AI on future wages.
PWBM estimates that the COVID-era Employee Retention Credit (ERC) will have cost more than $300 billion when the IRS finishes processing claims later in 2025, nearly four times the initial projected cost. Most of the ERC was paid retroactively, well after pandemic-related economic disruptions had ended, limiting its effectiveness as a worker retention incentive.
We estimate that AI will increase productivity and GDP by 1.5% by 2035, nearly 3% by 2055, and 3.7% by 2075. AI’s boost to annual productivity growth is strongest in the early 2030s but eventually fades, with a permanent effect of less than 0.04 percentage points due to sectoral shifts.
Deporting unauthorized workers over 10 years cuts Social Security revenue, raises deficits by $133 billion (10 yrs) and $884 billion (30 yrs). The Trust Fund depletes 6 months earlier; 75-year deficit rises by 0.25% of payroll.
We examine recent capital market dynamics in the context of budget reconciliation and trade policies. Understanding these dynamics requires modeling the interaction between microeconomic behavior and macroeconomic outcomes—an approach particularly well suited for the overlapping-generations lifecycle model.
Under current law, the 2017 Tax Cuts and Jobs Act (TCJA) will expire at the end of 2025, raising personal income tax rates back to 2017 levels. Some lawmakers propose extending the TCJA but with higher rates for high-income households. We consider three options.
Treasury data through April 28 shows that tax receipts are broadly in line with government projections made earlier this year, before the downsizing of the IRS was announced. Receipts from tariffs have significantly exceeded projections.
Many trade models fail to capture the full harm of tariffs. PWBM projects Trump’s tariffs (April 8, 2025) will reduce long-run GDP by about 6% and wages by 5%. A middle-income household faces a $22K lifetime loss. These losses are twice as large as a revenue-equivalent corporate tax increase from 21% to 36%, an otherwise highly distorting tax.
Cohabitation rates have increased significantly during the last two decades. Cohabiting individuals appear to have weaker workforce engagement and earnings. With changing U.S. demographics, the trend toward favoring cohabitation over marriage appears likely to continue.
Treasury debt held by the public is an explicit pay-as-you-go obligation. The government also runs implicit pay-as-you-go obligations, such as Social Security and Medicare Part A, which are twice as large. Both types of obligations require tax increases and spending cuts to balance the budget over time.
