Posted on 03/25/2008 12:30:05 PM PDT by NRG1973
Trustees for the government's two biggest benefit programs warned Tuesday that Social Security and Medicare are facing "enormous challenges" with the threat to Medicare's solvency far more severe.
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The trustees, issuing a once-a-year analysis of the government's two biggest benefit programs, said the resources in the Social Security trust fund will be depleted by 2041. The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped out by 2019.
Both those dates were the same as in last year's report. But the trustees warned that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes. For Medicare, that threshhold is projected to be reached this year and for Social Security it is projected to occur in 2017.
The first year that payments will exceed income for Social Security will occur in 2017, just nine years from now, reflecting growing demands from the retirement of 78 million baby boomers. Medicare is projected to pay out more than it receives in income starting this year.
"The financial difficulties facing Social Security and Medicare pose enormous challenges," the trustees said in their report. "The sooner these challenges are addressed, the more varied and less disruptive their solutions can be."
(Excerpt) Read more at news.yahoo.com ...
The FairTax would solve this. However any radical solution to either Social Security or Medicare (i.e., individual accounts) would solve it. However Congress will wait till ‘HELL’ freezes over or will tax your and my grandchildren out of most if not all of their income to support us ‘old-timers’.
Generation Reagan ping.
*According to Nancy Pelosi and Harry Reid.
LOL maintaining the fiction so as to not “scare the sheeple”. Wouldn’t do to have the sheeple wake up and realize they’ve been lied to.
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.
Freep mail me to be added or dropped. See my home page for details and previous articles.
They could cash me out today — just refund all that was paid into my account (the full 13% each paycheck) plus 10%interest compounded annually since 1973.
The trust funds are real. It's just that they are full of "assets" (special government IOUs) that must be redeemed from general funds so that benefits payouts can be made. And, the primary source of revenue for the general fund is you and me.
Let the Democrats crow about their "budget surpluses." The reality is that these paper surpluses were created through the use of clever accounting and improper use of restricted funds that, in the private industry, would be criminal in nature. But hey, when has the law ever stopped a liberal.
The next decade could be rough. Real estate values are already deflating and our financial system is under threat due to losses from the fallout. Add Social Security and Medicare to the mix. And, let's not forget that our presidential candidates want to add trillions of dollars of additional wealth transfer programs. Plus, we have the continuing problem of dealing with Islamists who want to kill us all. Perhaps this is why Moody's told the media after New Year's that the U.S. Government may lose its AAA credit rating within a decade.
But hey, Obama promises hope and change, right? The reality is that neither he nor Hillary nor McCain will do anything about the real problems that the U.S. is facing. Instead, like typical, short-sighted politicians, they will do only what it takes to win the next election.
I would accept being able to walk away now and no longer have to pay into it. Keep the money and I’ll never ask for a dime of it when I get older. In return I’ll pledge to deposit the $15K a year into a 401K/SEP IRA or anything else that qualifies as a retirement plan.
The reason why politicians never do anything is because people don’t want them to. Granny gets scared by the fear mongers that tell her that any attempt to fix the problem will screw her. Doesn’t matter is her grandkids are going to take it in the ass. Just bake a few cookies and all is well.
I know the answer. Let’s give soc sec and medicare to illegal aliens. That will solve everything!
The reason the politicians won’t do any thing is that like any entitlement the people that depend on it did not save any money for retirement. If they reduce the benefit there will be blood in the streets.
Reserves??? There are no damn reserves. Hasn’t been since ole LBJ sucked em out for his great society experiment, which is still ongoing by the way.
Where’s Captain Obvious?
The "Social Security Trust Fund" is government bonds. They are an asset to the Social Security Administration but a liability to the Treasury. As such they are a record of the money which was taken in "investments" for Social Security but was spent by the government on its own priorities which are not investments which will produce an income stream to the government to help retire the bonds in the SSTF.That's a long way of saying that the SSTF has no meaningful assets other than its current payroll tax take. That was more than Social Security paid out last year, and it will also be so this year - but each year the surplus diminishes, and it will go negative late in the next decade. That doesn't mean that there will be a crisis when it first goes negative, or that there won't be a crisis earlier because the government has been partially living off of that surplus which it has been borrowing year after year. What will happen is that the number of retirees collecting benefits will accelerate while the number of workers paying payroll taxes will stagnate. That will inexorably pressure the government to inflate away the value of the pensions which it cannot otherwise redeem.
Anyone who is retired or ever wants to, had better invest with a view to withstanding inflation. And figure on Social Security not being indexed to inflation in the future the way it is now.
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