Posted on 07/05/2025 7:55:01 PM PDT by delta7
The recent analysis by the Committee for a Responsible Federal Budget regarding the 2025 Medicare Trustees’ Report highlights the looming challenges with Medicare and Social Security, but it only scratches the surface of the deeper fiscal issues our country faces. To understand the full financial reality, we must go beyond trust fund “solvency” and examine the actual commitments the federal government has made—and continues to make—without fully accounting for them.
As the Congressional Budget Office has noted: “In the public debate, ‘solvency’ means keeping the trust funds from exhausting their balances and ensuring the ability of the funds to finance promised benefits. Defined that way, however, trust fund solvency is not a meaningful measure of the government’s ability to meet its future obligations.”
In other words, solvency in this context is more of a political or legal benchmark than an actual measure of financial health. The more alarming reality is how much these programs consume of the federal budget. In 2008, spending on Social Security and Health and Human Services (including Medicare) made up 38% of the federal budget. In 2024, that share has grown to 44%, crowding out other priorities and worsening the deficit.
Despite this, Congress continues to make benefit promises without a full understanding—or accounting—of their long-term costs. For example, lawmakers recently expanded Social Security coverage to additional workers without fully assessing the impact on the already strained and largely symbolic trust funds. This is like buying a car knowing only the monthly payments, without understanding the total cost or whether you’ll be able to pay it off.
One of the clearest signs of how disconnected federal accounting is from reality lies in the federal balance sheet itself. According to the Treasury Department, only $241 billion of liabilities for Social Security and Medicare are included in official federal financial statements. This is a tiny fraction of the real financial picture: Social Security carries over $50 trillion in unfunded promises, while Medicare’s unfunded obligations exceed $60 trillion.
Why is this massive gap ignored in the financial statements? Because, as Steve Goss, Chief Actuary of Social Security, explained: “An overriding uncertainty exists under the Social Security (and all Federal Social Insurance) programs. This is the Government’s right and ability to alter potential future benefits. Until benefits become due and payable, there is no binding commitment over which a worker has control and so no liability can be recognized.”
In plain terms, the federal government is not legally liable to pay any Social Security or Medicare benefits beyond the checks due next month. These are political promises, not binding obligations—yet millions of Americans base their retirement planning on the assumption that these promises will be honored.
Even the very concept of “trust funds” is misunderstood. The Treasury Department clarifies: “In the federal budget, the term ‘trust fund’ means only that the law requires a particular fund be accounted for separately, used only for a specified purpose, and designated as a trust fund. A change in law may change the future receipts and the terms under which the fund’s resources are spent.”
This differs drastically from the private sector, where trust funds involve a fiduciary duty to manage someone else’s money for their benefit. In government, trust funds are little more than internal bookkeeping entries that Congress can change at any time.
At Truth in Accounting, we believe the public and lawmakers deserve honest, complete, and transparent accounting. That includes recognizing the full cost of Social Security and Medicare, understanding the long-term implications of policy changes, and being honest about what has been promised—and what has not.
Until we do so, we are not just engaging in poor financial management—we are undermining the American people's trust and passing unsustainable burdens onto future generations.
“The real bankruptcy date was 2021 when revenues stopped covering payments and the general revenue had to be tapped.”
So, to pursue your logic, if had $10,000,000 dollars but spent $10 more than my income I would be bankrupt?
Here’s how the system works. The Treasury determines the amount of money it needs to pay out for all government liabilities, including the interest on maturing bonds, as defined by law.
They sell bonds to the Federal Reserve money center banks. The central bank (Fed) deposits funds in the accounts of the member banks sufficient to buy all the bonds. The member banks deposit the funds in the Treasury account.
They then auction the bonds to other banks at a slightly higher price, allowing them to make a profit. The non-member banks offer them to anyone worldwide with cash who needs to park their money with no risk.
For accounting purposes, outstanding bonds are classified as debt. This is a fiction. They could buy back the bonds at any time by requesting the funds from the Federal Reserve to do so.
As long as the Treasury only pays in dollars and never borrows currency from another country, inflation is determined by the economic equilibrium between supply and demand, interest rates, and taxation.
The decision to provide retired seniors with a guaranteed income is a political and moral one, not an economic one.
Except you spent that $10 million years ago and just have a stack of post-it notes reminding you to put the money back before you get caught.
🔝🔝
It’s all about stealing from AMERICAN CITIZENS
Especially since George W Bush
44% of the yearly federal budget for SS & Medicare...another yearly 13.2% of the federal budget goes towards interest payments.
reducing SS payments to high net worth recipients reduces SS to means or needs testing...which it kinda does already.
I tried to get GROK to define the differences between means testing and earnings testing...
it and i gave up
https://grok.com/chat/12e7837d-5aad-48f0-bf3e-b18fe8326f6c
Trust funds? What trust funds? It’s paid by the Treasury that prints up however much money it needs to print (or create as 1’s and 0’s).
I try to be an honest man.
Therefore I will give Al Gore this...We need a “lock box” for SS taxes.
Al Gore deserves credit because politicians of both parties ignore the ponzie scheme consequences.
SS will always be paid with a CODA over time. It equals to the deflation of the dollar about as well.
Nobody cares as long as SS recipients get their money at the expense of those younger suckers paying in, like the pyramid scehme is it.
Boomers do not care as long as they got theirs.
“The Weimar Republic is good example of that, except the US economy today is much bigger than Old Germany. It’ll be quite a mess.’
The Weimar Republic created that inflation on purpose, to sabotage reparations. Our government? I wouldn’t put it past them. Would explain why they, especially the Democrats, are not very concerned about the debt.
It will go broke before I retire. I’ve accepted for quite a while that I’ll work until death.
Remove the scum that shouldn’t be on SSI.
BINGO!!!!
Stop all the “programs” sucking off SSI.
Politicians of BOTH PARTIES saw a huge pile of cash to spend and SPENT IT multiple times over.
I suggest we confiscate all the wealth of ALL POLITICIANS who have ever been in Congress more than one term. Make Congress and their Families the NEW POOR!!!
“Boomers do not care as long as they got theirs.”
Sorry. We boomers do care. Put the blame where it belongs. And is on the idiots we put in office. Both Dems and Repubs. Not a nickels difference in the two when it comes to buying votes.
Bkmk
You can depend on that.
If somebody breaks into those filing cabinets in West Virginia and steals the non marketable Social Security bonds we will be in real trouble.
Until then everything is good.
Lol.
How about most of your assets are locked up in 401k’s that have yet to be taxed?
—————-
Under Trump, most of the talk of “ means testing” on assets has blown away. What to watch will be his successors.
The problem will be kicked down the road until it reaches a crisis level ( not yet), then “ over reaction” changes will be made….history shows us this.
I suspect the Republicans ( not the Democrats) to make the changes, “ here is the medicine, you will take it”….
Social security is Government ownership of old people. If they own you, they can do what they want. It must be phased out over time. Freeze current benefits for those on it now. Kick out everyone who was never meant to receive benefits in the first place. Offer buyouts to those 10-20 years away from retirement such that halve of them take it. Those over 20 years away are on their own as far as retirement is concerned but their social security tax burden gradually reduces as recipients die off and in addition, they will own their own retirement. In 30 years, it’s basically gone, never to be instituted again. Everyone sacrifices and in the end, our grandchildren are free.
If they simply raised the cap to 250K, we’d be good another 50 years. It wouldn’t even hurt anyone.
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.