"And what do we see? Well, the annual deficits tend to actually be surpluses! And over the course of that 34 year timeline, we not only would have NOT added any deficits since 1982, but actually accumulated nearly $1 TRILLION in surpluses!
And here's the interesting data point: what was the national debt in 1982? Well, according the US Treasury, it was just $1.14 trillion."
Which would be about $106 trillion SHORT of the unfunded debt liability of social security and medicaid:
http://www.ncpa.org/pub/ba662 Impact on Federal Revenues. On average, every year since 1970, Medicare and Medicaid spending per beneficiary has grown 2.5 percentage points faster than per capita Gross Domestic Product (GDP). In the future, Medicare spending may rise even faster than the Trustees estimate. According to the Congressional Budget Office (CBO), if Medicare and Medicaid spending continues growing annually at 2.5 percentage points above GDP growth:
By 2050, Social Security, Medicare and Medicaid (health care for the poor) will consume nearly the entire federal budget.
By 2082, Medicare spending alone will consume nearly the entire federal budget.
Can Higher Taxes Solve the Problem? The CBO also found that if federal income tax rates are adjusted to allow the government to continue its current level of activity and balance its budget:
The lowest marginal income tax rate of 10 percent would have to rise to 26 percent.
The 25 percent marginal tax rate would increase to 66 percent.
The current highest marginal tax rate (35 percent) would rise to 92 percent!
Pay-As-You-Go. Social Security and Medicare are in trouble precisely because they are based on pay-as-you-go financing. Every dollar of payroll taxes is spent. Nothing is saved, and nothing is invested. The payroll taxes contributed by today's workers pay the benefits of today's retirees. However, when today's workers retire, their benefits will be paid only if the next generation of workers agrees to pay even higher taxes.
What about the Trust Funds? The Social Security and Medicare Trust Funds exist purely for accounting purposes: to keep track of surpluses and deficits in the inflow and outflow of money. The accumulated Social Security surplus actually consists of paper certificates (non-negotiable bonds) kept in a filing cabinet in a government office in West Virginia. These bonds cannot be sold on Wall Street or to foreign investors. They can only be returned to the Treasury. In essence, they are little more than IOUs the government writes to itself.
Conclusion. The Social Security and Medicare deficits are on a course to engulf the entire federal budget. If our policymakers wait to address these growing debts until they are out of control, the solutions will be drastic and painful. +++++++++++++ MY CONCLUSION: Hardly seems like this is a path that is easy and includes NO PAIN, does it? It's time to face reality and pay the piper for our years of out of control DC thuggery of our national treasures. Getting out of this MESS will require PAIN and DISCIPLINE. I'm not sure if we're ready to endure it - but clearly, if we don't we're headed for a national financial emergency 4 way bypass surgery or death - both of which sound very painful to me...