1. Reign in spending and reduce government. And that ain't going to happen because it would actually make the politicians make hard decisions and act responsible (how are they going to buy votes?).
2. Inflate the way out of this. The government may have promised you $2000 a month in Social Security and Medicare - but if that only buys a lunch it will mean nothing. And the politicians will have to take no hard decisions but will have "solved" this issue.
So - invest in hard assets (gold, real estate, Swiss franc, etc.) that go up with inflation. Certain stocks will do well.
Timing is key (housing bubble that is deflating right now)
Comments?
Privatizing Social Security and Medicare would work too.
It's already happening. Due to changes in the way the CPI was calculated during Clinton's tenure, inflation is understated, so Social Security COLAs are understated as well. If you're one percent low per year, that negatively compounds. By 2020, if current trends continue, Social Security benefits will probably be only about 50-60 percent of their 1992 equivalent value. And that is about what the system can provide since there is no SS Trust Fund with real assets.
What the government will probably do: Print more money and
loosen credit, on and on!