Posted on 01/27/2011 11:02:01 AM PST by SeekAndFind
The Congressional Budget Office said Wednesday that Social Security will pay out $45 billion more in benefits this year than it will collect in payroll taxes, further straining the nation’s finances. The deficits will continue until the Social Security trust funds are eventually drained, in about 2037.
Previously, CBO said Social Security would start running permanent deficits in 2016. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.
Remember the payroll tax cut for employees that was part of last month’s tax cuts deal? Democrats warned at the time that that would play into the GOP’s hands on entitlement reform by establishing a new lower baseline rate that’s insufficient to fund the program. (The current rate is temporary, but as we’ve learned, temporary tax rates are hard to raise.) The result: An accelerated, expanded shortfall in Social Security that will inevitably intensify cries that the program is unsustainable and needs to be reformed. Which, of course, it does: As noted above, assuming The One wins a second term, Social Security would have begun running deficits before the end of his presidency anyway. As it is, two graphs for you from today’s new CBO report. First, the Baby Boomer effect on expenses over the next 10 years:
And second, the offsetting receipts, with the Medicare line self-explanatory:
This isn’t the only horrible news in the report by a longshot, either. CBO’s projected deficit for this year is a cool $1.5 trillion or 9.8 percent of GDP, which is just two-tenths of one percent less than last year’s all-time budget-buster. And there’s not much revenue relief coming from new jobs: CBO expects that unemployment will remain above eight percent through 2012 and won’t get back to a historic norm of 5-6 percent or so until 2016. This ship has already started to sink, in other words, and yet Captain Hope chose to use his annual megaphone last night to talk about stuff like high-speed rail. As Megan McArdle says, terrifying.
I’ll tell you what... you let me opt out of Medicare and social security, keep the money that would normally go to it, and I won’t apply for it when I turn 65 (or whatever age it’ll be when I retire).
I’m sure millions of people my age would do the same thing. It may break the system for a while, but it means the system will go away and the free market will once again be allowed to reign in my retirement years.
This Ponzi scheme has to stop.
Really don’t want to be reminded how much of my income has gone into this pit over the last 27 years.... Especially when on top of it our Gov’t funds the most insulting, irresponsible, insane, and infuriating BS with my money.
Except there is no money in the “trust fund.”
Why do the sheeple believe this crap?
Oh thats right, DC would look like Tunis if they actually told the truth.
Figure in what the government has borrowed from the Social Security and the $1.5 Trillion moves to $4 Trillion. These fools need to stop stealing our money.
Is this the same CBO that tells us how wonderful Obamahealth care is and how it is going to save us all from the deficits?
The problem isn't the boomers on the system. That was the glory of their existance, the huge rewards they pumped in beyond what was needed. The problem is doing what they legislated as (was) and is congress's job. The argument being thrown out there is that; We're not going to pay our bills tommorrow because we won't have enough money to cover what we're spending today. So stop spending.
How do you drain something that doesn't exist? Drain the funds that are used to pay retirement and health benefits to congress people.
A slight deficit is better than a surplus in the payroll tax. Surpluses are just spent anyway.
Every year the CBO should estimate next years SS expenditures and the payroll tax should be adjusted to just barely pay for that.
All you have to do is look in government officials present and past includes Congress, POTUS; etc and their friends accounts; etc and you will find our money.
Both parties are preparing to cut way back on the spending on these programs. It could be that recipients will be means tested like AFDC recipients used to be. On Medicare, a switch to vouchers will reduce costs and it will be some time before most people notice the reduction in benefits that flow from that change. Actually, that's good because it will give seniors more time to make alternative arrangements for their health care.
Right now, both parties are arguing over which side should be the first to propose welfare cuts, but both sides seem to recognize the need to do some significant cutting.
The list, ping
Let me know if you would like to be on or off the ping list
“You mean they lied and gave false financial information? Don’t you go to jail for that?”
No. The government routinely lies, cheats, steals, kidnaps, and murders with impugnity. In fact, it’s arguable that such activities comprise government’s job description.
But, in the case of Social Security and FICA, the not every branch of government lied. In Helvering v. Davis and Nestor v. Flemming, the Supreme Court has forthrightly declared that employee FICA “contributions” are really income taxes, employer FICA “contributions” are really excise taxes, that payment of such taxes confers no property right or other earned right to any benefit under Social Security, that despite its name FICA is not insurance, that participants only have 14th Amendment redress in the event that Congress modifies or eliminates the Social Security program.
The bottom line is that the boomers paid for the “Greatest Generation”, and will shortly be screwed like the last round of “investors” in a giant coercive Ponzi scheme.
And it comes as no surprise to anybody who’s been paying attention. Heck, Goldwater warned about it back in 1964.
That should read “impunity” above.
There is no trust fund. There is a filing cabinet in a Government office someplace stuffed full of worthless paper from the Treasury. Anyone believing there's an actual account with their cash in it is very, very wrong.
The people who did this should be hunted down with dogs, tarred, feathered, and then strung up for all to see.
No problem. Hussein will begin saving SS money by ending payments to all recipients who post or comment on FR!!!
SS has plenty of money(sarc) in the form of IOUs from Treasury since the program began being overfunded in the 1980s.
Anybody know how much overpayment into SS has been made since that time?
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