Posted on 08/11/2014 9:07:54 AM PDT by Kaslin
With all the controversy over the failed and costly Obamacare program, it’s understandable that other entitlements aren’t getting much attention.
But that doesn’t mean there aren’t serious problems with Medicaid, Medicare, and Social Security.
Indeed, the annual Social Security Trustees Report was released a few days ago and the updated numbers for the government-run retirement program are rather sobering.
Thanks in part to sloppy journalism, many people only vaguely realize that Social Security is actuarially unsound.
In reality, the level of projected red ink is shocking. If you look at the report’s annual projections and then adjust them for inflation (so we get an idea of the size of the problem based on the value of today’s dollars), we can put together a very depressing chart.
How depressing is this chart? Well, cumulative deficits over the next 75 years will total an astounding $40 trillion. And keep in mind these are inflation-adjusted numbers. In nominal dollars, total red ink will be far more than $150 trillion.
That’s a lot of money even by Washington standards.
Just as worrisome, the trend is in the wrong direction. Last year, the cumulative inflation-adjusted shortfall was $36 trillion. The year before, the total amount of red ink was $30 trillion. And so on.
But regular readers know I’m not fixated on deficits and debt. I’m much more worried about the underlying problem of too much spending. So let’s look at the annual data showing how much payroll tax will be generated by Social Security and how much money will be paid out to beneficiaries.
As you can see, the problem is not inadequate tax revenue. Indeed, revenues will climb to record levels. The problem is that spending is projected to increase at an even faster rate.
Once again, don’t forget that these are inflation-adjusted numbers. In nominal dollars, the numbers are far bigger!
Why is the program becoming an ever-larger fiscal burden? The answer boils down to demographics. Simply stated, we will have more and more old people and fewer and fewer younger workers.
So if we do nothing, we’ll be Greece in 20 or 30 years.
That’s not a happy thought, so let’s close on a humorous note. Here’s a joke about how Social Security works, and you can enjoy some Social Security-themed cartoons here, here, and here.
P.S. I’m confident that few people will be surprised to learn that Obama’s supposed solution to this mess involves a huge tax increase.
P.P.S. The real solution is personal retirement accounts. I think Australia is the best role model, but Chile also is a big success.
P.P.S. The good news is that the American people are quite sympathetic to personal retirement accounts.
P.P.P.S. Statists try to scare people by claiming private investments are too risky, but one of my Cato colleagues showed that workers would be better off even if they retired after a stock market crash.
P.P.P.P.S. By the way, Social Security is a really bad deal for blacks and other minorities with lower-than-average life expectancies.
P.P.P.P.P.S. In the interests of fairness, I’ll admit the biggest weakness in the argument for personal accounts is that we might not be able to stop politicians from confiscating the money at some point in the future.
I just want back what I was forced to pay into it.
Crack down on the SSI abusers, many with multiple IDs and non-existent ailments, and SS’ll be a lot nearer to solvency.
Nancy Pelosi said that Social Security is stable until 2035, and after that can still pay out 75% of promised benefits. So Democrats see no problem ahead.
HAHA, I didn’t see him reference the Trust Fund, Dems say that makes it solvent for another 20 years.
Excellent point
Nancy Pelosi has never been in the same room with a sane thought.
Bottom line for the 80% of under 35er’s who voted for and defend Obama - they will have ZERO social security as recipients but will PAY through the nose until it collapses.
Add that to a 6 year Obama recession, no jobs, and for many the mandate to pay for healthcare and he is literally sucking that group dry - and they still don’t get it and support liberals. Maybe Hillary will save them :)
Talk about low information voters, this group is insanely stupid and uniformed.
yeah... I don’t expect to get it, so I’m planning accordingly.
No way will it make SS more solvent. SSI is funded from general revenues. At a cost of $54 billion in fiscal year 2013 8.4 million people collected SSI benefits (Dec 2013). The SSA administers the program.
Why is this guy fixated on Social Security? There is still, on paper a $4.6 trillion surplus in the SS trust fund. SS could be repaired over the years if Congress and the President would only do it. Shortfalls stay around $100 - $200 billin per year for another decade, small stuff in current federal budget terms. - SS could be fixed.
Maybe he should tell us how the future funding for Medicaid and food stamps looks. Lots of folks paying into specific funds to fund those? Poverty programs already cost $1 trillion plus annually and will only grow in the future with current programs and Obamacare deficits.
Instead of using scare tactics by looking 75 years into the future of SS, people need to be looking at next year and the next decade and start making changes in all unsustainable programs.
No one in Washington wants to fix it because plans to do so would not allow those on power to dip into the fund whenever they want. Here’s former Congressman Thad McCotter’s plan which was introduced to Congress 3 years ago. He dared to take on Social Security and of course he got set up and run out of Congress. Here’s the plan, if you didn’t see it. http://spectator.org/articles/36775/mccotter-trailblazes-social-security-prosperity
You are being pessimistic.
Obama’s death panels with fix SS.
My bad!
Only slightly! Particularly as the current final slide into abject tyranny continues unabated.
Within 5-to-10 years information like this will not be made available by the ruling masters. Replication of the 1930's Soviet Union with lots of current technology bells and whistles will mean no serf will even ask.
Discussions about Soc Sec, Medicare, or Medicaid are an exercise in futility. Just as they have always been, judging by the lack of any successful past attempts to remedy the problems.
Yeah my dream of retiring (or scaling back) at 55-60 is gone. Looking to keep working until 65+.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.