Posted on 07/06/2016 9:35:13 AM PDT by Kaslin
The boards of trustees of our Social Security and Medicare programs just issued their annual report, and we learn, once again, that both programs are fiscally insolvent.
The trustees project there will be insufficient funds from the Social Security program to pay its obligations beginning in 2034, 18 years from now, and Medicare will fall short in 2028, 12 years from now.
Given that both of these programs play outsized roles both in the federal budget -- combined they represent 41 percent of federal spending in 2015 -- and in the personal lives of just about every American citizen, you'd think there would be a big uproar about this.
But the silence is deafening.
In a recent Gallup poll listing 17 issues "extremely/very important" to voters in their considerations for the presidential race, neither Social Security nor Medicare are even on the list, which may be the reason why neither of the presumptive presidential candidates seem to be too serious about this.
AARP asked the Clinton and Trump campaigns how both plan to deal with Social Security.
Hillary Clinton is so unconcerned about the massive projected shortfalls that she actually wants to expand the program. She wants to transform Social Security into another huge welfare program by expanding benefits for lower-income earners and raising taxes on higher earners.
The response from the Trump campaign was equally enigmatic in that there was no response at all, except to assure us that if the economy grows everything will be just fine.
Social Security has been called a Ponzi scheme because it is not an investment program. The taxes paid by those currently working pay the retirement benefits of those currently retired. But this scheme has become increasingly unviable as our population has changed and aged.
As the trustees point out, "Both Social Security and Medicare will experience cost growth substantially in excess of GDP growth through the mid-2030s due to rapid population aging caused by the large baby-boom generation entering retirement and lower-birth-rate generations entering employment."
But the games we play with ourselves are even worse. Social Security is already in shortfall and has been since 2010. What has been happening is that part of our Social Security taxes were used to establish a "trust fund," and interest from this so-called trust fund is used to cover the shortfall.
But what is this trust fund? U.S. treasury bonds. In other words, we buy our own debt -- issued by the U.S. Treasury -- that we owe to ourselves and call it a trust fund.
According to the trustees, this interest will cover the Social Security shortfall through 2019, and then "interest income and redemption of trust fund asset reserves from the General Fund of the Treasury will provide the resources needed to offset Social Security's annual deficits until 2034, when the reserves will be depleted."
The last projection on Social Security from the Congressional Budget Office was more pessimistic than the trustees' report. According to the CBO, "Social Security's trust funds, considered together, will be exhausted in 2029. In that case, benefits in 2030 would need to be reduced 29 percent from the scheduled amounts."
Without taking action, the CBO says, Social Security benefits will be substantially cut in just 13 years.
Social Security, originally conceived when the nation had 40 plus workers to support every retiree, is no longer viable now that we have about 3 workers for every retiree.
Too many politicians see their business as telling people what they think they want to hear rather than what they need to hear.
Social Security needs a dramatic overhaul. I have written for years that we need to transform this government tax-and-spend program to one of private savings. This will, in particular, help those of low income who have barely any savings or opportunities to build wealth.
But we won't go anywhere if we have no one with the courage to tell the truth and lead. Where are these people?
Because most of them would be hanged.
Because they don’t tell the truth about anything.
The “trust fund” is bogus accounting and designed to bamboozle the gullible.
As to the politicians, they are sociopaths and pathological liars. That is who they are.
They are all skilled can kickers.
Ahhhh. They issues these kinds of scare reports every time their budgets are up for discussion in Congress.
Like the Post Office, they want to sound near insolvent so they can get a bigger budget.
Of course, they make no mention that SS recipients have only had one 2% increase in the last 4 years. Next year, recipients MIGHT get a 0.2% increase [that averages about $2.00 per month].
Why don’t they tell the truth?
Why bother? Politics is a very short-term game.
It will be someone else’s problem in the future, so why scare people now, or worse yet, let your statist, progressive, pandering opponent accuse you of wanting to destroy Soc. Sec, and wanting to throw grandma over a cliff?
Social Security is bankrupt; it has been bankrupt from the beginning. You can whine and cry all you like, you won’t change the facts. Every penny being given to a current Social Security recipient is coming directly from the paycheck of someone currently working. You have no ‘social security account’. There is no trust fund. There is only ripping off the people who currently work for pay, and giving to the people who used to work for pay. Back when you were working didn’t “pay into” a “social security account”. You paid directly into the pocket of a social security recipient.
Charles Ponzi was imprisoned and deported for arranging a similar scheme. Social Security is worse than Ponzi: Ponzi’s schemes were voluntary. Social Security is armed robbery.
But, but we were promised back in 1964!
https://www.ssa.gov/history/ssa/usa1964-2.html
Self-Supporting
“The program is designed so that contributions plus interest on the investments of the social security trust funds will be sufficient to meet all of the costs of benefits and administration, now and into the indefinite future—without any subsidy from the general funds of the Government. Both the Congress and the Executive Branch, regardless of political party in power, have scrupulously provided in advance for full financing of all liberalizations in the program.”
And HERE is where your money went. Read and Weep!
https://www.ssa.gov/OACT/ProgData/fundFAQ.html#n4
*****
A few years ago AARP magazine had an article “proving” SS was not a Ponzi scheme. They showed how each was set up, and their proof was ALL Ponzi schemes collapse. Social Security has not collapsed, therefore it is not a Ponzi scheme.
A few pages farther on was an article on Social Security by Jane Bryan Quinn in which she showed that Social Security was set up, just like a Ponzi scheme although she did not say it that way.
You are correct. I was robbed for 30 years in order for someone else to receive their SS.
Because frankly the public does not want to hear the truth.
George W. put a tentative, tepid toe in the water on this at the beginning of his second term. He got his head handed to him.
Politicians won’t try THAT again.
The cap on payroll tax is going away IMHO. And a Tobin Tax will be implemented to help fund Social Security. The only fixes that are politically palatable to most voters IMHO.
They like to keep breathing................................
This is why the FedGov has been trying to legalize illegals - they want their wage withholdings to replace the 40 million (otherwise SS paying) Americans we have sacrificed to abortion.
AKA T-Bills............................
***Social Security, originally conceived when the nation had 40 plus workers to support every retiree, is no longer viable now that we have about 3 workers for every retiree. ***
And when those workers retire they will require three times the workers to support them.
1 retiree=3 workers.
3 retirees=9 workers
9 retirees=27 workers.
100 million retires=300 million workers
300 million retirees=900 million workers.
900 million retirees= Collapse. There are not enough workers to support retirees anymore.
Maybe the government will find a way to kill off retirees after ten years of retirement.
How it was originally supposed to work.
Man works and hopefully retires at 62. Life expectancy was 57 years.
Wife draws his social security and dies at 64 years.
Plenty of money left for people who do make it to retirement.
Then along came Penicillin and people started living a lot longer.
But they don’t pay. They work ‘under the table’ and send most of their earnings to family back home........................
Bush wanted People to actually have some of the Money they contributed to SS invested and available to them when they Retired onto their State should they Pass Away.
He was eviscerated for even suggesting it.
My Childhood Best Friend died at age 61. He had been “contributing” to SS and Medicare since he was 16 Years Old. I estimate he contributed about $250,000 including the so called Employer match (as I have) to both Programs over his Lifetime.
His Family got $255 to help pay to Cremate him. That’s it.
Correction:
Bush wanted People to actually have some of the Money they contributed to SS invested and available to them when they Retired OR PASSED ON TO THEIR ESTATE WHEN THEY PASSED AWAY.
That’s right, ergo the push to legalize.
Why Don’t Politicians Tell the Truth About Social Security?
Why Don’t Politicians Tell the Truth? - fixed
They don’t tell the truth because they want to get elected, telling the truth makes one unelectable.
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