Let Them Go Bankrupt, Soon, Solving Social Security and Medicare

NEWSWEEK ^ | May 23, 2009 | Robert J. Samuelson

[Brilliant]

When the trustees of Social Security and Medicare recently reported on the economic outlook for these programs, the news coverage was universally glum. The recession had made everything worse. Social Security, Medicare face insolvency sooner, headlined The Wall Street Journal. Actually, these reports were good news. Better would have been Social Security, Medicare risk bankruptcy in 2010.

It's increasingly obvious that Congress and the president (regardless of which party is in power) will deal with the political stink bomb of an aging society only if forced. And the most plausible means of compulsion would be for Social Security and Medicare to go bankrupt: trust funds run dry; promised benefits exceed dedicated payroll taxes. The sooner this happens, the better.

That the programs will ultimately go bankrupt is clear from the trustees' reports. On pages 201 and 202 of the Medicare report, you will find the conclusive arithmetic: over the next 75 years, Social Security and Medicare will cost an estimated $103.2 trillion, while dedicated taxes and premiums will total only $57.4 trillion. The gap is $45.8 trillion. (All figures are expressed in "present value," a fancy term for "today's dollars.")

The Medicare actuaries then dryly note what would happen once the trust funds for Social Security and Medicare's hospital insurance program are depleted: "No provision exists under current law to address the projected [Medicare] and [Social Security] financial imbalances. Once assets are exhausted, expenditures cannot be made except to the extent covered by ongoing tax receipts." Translation: benefits would fall. Social Security checks would shrink; some Medicare bills wouldn't be paid in full; and the shortfalls would progressively worsen...

[Brilliant]

Looks like Obama is following the advice of liberal Newsweek columnist, Robert J. Samuelson.

[w1andsodidwe]

All ponzi schemes eventually play out and there is not enough money to fulfill the original promise. Of course, the lower birth rate (think abortion) didn’t help.

[Lonesome in Massachussets]

Samuelson has always struck me as a realist and an adult, one of the few in the LSM. He hasn’t changed his tune on Social Security and Medicare noticably in the last 20 years.

The Democrats have been demogoguing the issue for the last 40 years, whenever the Republicans try to add a note of realism or responsibility.

[Erik Latranyi]

If Obama is attempting to implement the Cloward-Piven strategy to destroy the country so it could be remade into a socialist utopia, conservatives should support it.

Let Social Security and Medicare fail.
Let the government go bankrupt.

Conservatives will also have a chance to remake this country into a better Republic than the founders created.....call it USA v1.1

[screaminsunshine]

I always knew it was a scam. I want my money back. These crooks and Traitors should be arrested for Fraud.

[KarlInOhio]

And the most plausible means of compulsion would be for Social Security and Medicare to go bankrupt: trust funds run dry; promised benefits exceed dedicated payroll taxes.

Let's say it again: there are no trust funds. There is no box of money waiting to be spent. There is nothing to cover future expenditures except the ability to collect either the Social Security payroll tax, the general income tax to cover "withdrawals" from the "trust fund" or just borrowing another few trillion dollars from the Chinese.

The trust fund is the equivalent of a drunk saving for his kids college buy putting a $20 bill in a cookie jar every week, but then immediately taking it back out to spend to spend on beer and replacing it with an IOU. The college won't accept those IOUs, so he either has to pay for college with current paycheck, borrowing or recommending the kids not go to college.

[Brilliant]

He may be a realist, but he’s still a liberal. The interesting thing about all this is that the Dems have figured out that the Medicare bill of which they’ve denied the existence for the last 45 years is about to come due, and they are trying to hide their prior indiscretions by expanding the program to everyone and hiding the shortfall in the middle of another shortfall. In order to do that, they’ve got to convince the seniors to let go of Medicare and embrace their new, much less generous program. It’s much less generous than Medicare, and even that’s after they’ve artificially sweetened it with unsustainable subsidies that will disappear by 2020.

[dalereed]

“I always knew it was a scam. I want my money back.”

Don’t mess with it!

I’ll be dead before the money runs out!!!!!

[buckalfa]

“The Democrats have been demogoguing the issue for the last 40 years, whenever the Republicans try to add a note of realism or responsibility.”

So true, but are not the proposed Medicare payment cuts in the Rat health care reform plan a back door way of addressing at least part of the Medicare Trust Fund issue? Reduce payments and thus access without scaring the retired entitlement voting block?

[screaminsunshine]

You must be on the Obama Die Fast Health Care Scam.

[Cicero]

Well, Samuelson was right. Social Security was a Ponzi scheme. Always was, from the earliest days.

And I suppose he is right that the sooner this delusional system collapses, the sooner we can get on to something else.

But there are two major problems with that. One is that us retired folks poured payments into social security and medicare all our lives, and actually are getting back LESS than we put in. That’s because the system is loaded down with illegals and people on the dole.

Speaking personally, I put money into a retirement account as well as social security, but with the Gov taking out all that money I couldn’t build as big a retirement account as I would have otherwise. And it’s not really enough to live on without social security—which I paid for through the nose.

So, I guess we’ll need those Death Panels to deal with the fallout—all those retirees who paid into the system and now get screwed.

The second problem, maybe even bigger, is that the collapse of the social security system won’t lead to any lowering of taxes or encouragement of savings. Instead, all the money will be stolen by INCREASED taxes used to pay off the shortfall in the union retirement funds, especially the Public Employees unions.

In other words, instead of a piece of “creative destruction” that will lead to more sensible economic plans, things are only going to get worse. They’ll kill off all the old people who worked and saved, and give the proceeds to their clients in the unions or among the illegals.

This is NOT a good situation.

The sins of Woodrow Wilson led to the Great Depression, but instead of fixing the problems, FDR used the crisis to make them much worse. Obama and the Dems can be counted on to do the same, and the current Republican leadership has already shown that it is just as corrupt and clueless when these economic crises hit.

[marsh2]

The stink bomb will be when Grams and Grandpa, Mom and Dad have to move in on the next generation because they can no longer physically work and haven’t enough income to live on their own. That means more of the next generation’s disposable income will be going to feed, house cloth and care for the older generation, and not the younger. Add the staggering debts they will inherit and it will be a terrible burden.

If the next generation walks away from the problem, the public will have to carry the burden. There is no getting around it. No wonder they are promoting the “death panels” to limit life span and rellocate resources to investment in the future.

[mia]

You mean the “Geriatric Genocide” bill?

[screaminsunshine]

Bingo! The pathetic desperate Varments have to bankrupt the whole Taco and blame the Private Sector. TRAITORS!

[cranked]

What exactly is he saying that many experts have not been saying for sometime?

At any rate, let’s let the USPS, FDIC, and a number of other Federal-run programs go bankrupt. He’ll, maybe Samuelson would agree that we should let the whole of the United States go bankrupt....since of course, we all know, whether one wants to admit it or not, that the enactment of ObamaCare will inherently speed such an occurrence....will Mr. Samuelson acknowledge that, as well?

[screaminsunshine]

We will just have to keep working. I am due next year and will gladly give it up for my Freedom from these Communists. UP THEIRS! I just want them arrested and jailed for fraud. Like Maddoff.

[GOPJ]

Other than the uber MSM elites this one’s not going to fly - too many journalists are being denied pensions - and will need Social Security. They’re going to be reacting the way the rest of us do...

[right way right]

Nobody will need Social Security in the near future.

When you get old and cannot work anymore there will be an old folks pound.

It’s adoption or euthenasia.

[screaminsunshine]

I am for a USA bankruptcy. And the elimination of all Federal ee’s and agencies except the original ones. Out with it.

[cranked]

Right....lets replace one fear for another fear being that "retired entitlement voting block" fears ObamaCare or have you not seen the latest polling? No, the proposed Medicare paymetn cuts are not an attempt at reform or are they a "backdoor" to addressing any aspect of the Medicare Trust Fund issue cause if it was, the libtard Dems would be touting such, as with Barry.