Posted on 06/10/2022 9:06:06 PM PDT by SeekAndFind
A week ago we learned that the go-broke date for Social Security had been pushed back by a whole year:
The annual Social Security and Medicare trustees report released Thursday says Social Security’s trust fund will be unable to pay full benefits beginning in 2035, instead of last year’s estimate of 2034. The year before that it estimated an exhaustion date of 2035.
The projected depletion date for Medicare’s trust fund for inpatient hospital care moved back two years to 2028 from last year’s forecast of 2026…
When the Social Security trust fund is depleted the government will be able to pay 80% of scheduled benefits, the report said. Medicare will be able to pay 90% of total scheduled benefits when the fund is depleted.
So the programs won’t vanish but obviously a 20% cut in Social Security would be tough on the people who are living on that. Today Megan McArdle has a piece pointing out that this problem hasn’t exactly snuck up on us.
I have been writing about these trustees reports for more than 15 years. When I started, all these projections sounded comfortably far off — we had decades to fix the problem! Now we have 13 years. And in all that time, we have done nothing at all, except watch the date of insolvency advance.
In 2008, it was 2040, and the people likely to be worst affected — those who would be eligible to retire just as the trust fund was exhausted — were 35. Now, the people facing the most disruption are 54, much closer to retirement than to their college graduation.
The solutions to this problem are things everyone already knows about too, but they aren’t likely to happen. No one wants to touch the third rail of politics.
Pretty much everyone knows how we’re going to fix Social Security: through some combination of tax increases and benefit cuts…
Senior citizens are America’s most powerful voting bloc. Any party that makes those changes unilaterally will be slaughtered — which means neither Republicans nor Democrats will do it unilaterally, unless they happen to be the unlucky folks who get stuck holding the bag when the money actually runs out…
Furthermore, Democrats now have a much more muscular left wing than they did a decade and a half ago, and that wing wants Medicare-for-all and increased Social Security benefits,, not an austerity agenda. The Republicans, meanwhile, have sprouted an energetic populist faction that is also likely to oppose any attempt to touch benefits — or to raise taxes or allow in immigrants who might temporarily ease some of the fiscal strains on the programs.
I think she’s right on both counts. The squad and their fans will never accept any kind of cuts to these programs when what they really want is single payer health care (Medicare for all) and maybe universal basic income (Social Security for all). On the other side of the aisle, populists don’t seem eager to engage in entitlement reform either. Over in France, we just had an election where President Macron was demonized for trying to liberalize the French economy. Meanwhile his populist right-wing opponent, Marine Le Pen, ran on lowering the French retirement age to 60.
You don’t have to guess at how this would go even if some Republican were to propose reform. The White House was so eager for someone to demonize that it attributed a brief mention in Sen. Rick Scott’s 11-point-plan (which said all Americans should be asked to pay something in federal taxes) to the entire party. They got 3 Pinocchios for that but you get the idea. Democrats are on a hair trigger to attack on this issue.
It’s hard to see how we’re going to get this fixed in the current environment. I guess we’re just going to keep watching the go-broke date get closer until someone has no choice but to deal with it.
year ratio covered workers : 1 beneficiary
1940 159.4 : 1
1945 41.9 : 1
1950 16.5 :1
1980 3.2 : 1
2013 2.8 : 1
Social Security was really a tax scheme sold as a safety net. It was expected to take in more than it pays out.
Reality happened, and now it pays out more than it takes it. Can't fixed what was made broke.
“Grown men running around sweating?”
Yes. And — quite UNlike Congress — these guys actually achieve their competitive goals WITHIN the constraints of a time-limited, rules-based system. This sort of rules-based system is, obviously, something Congress knows nothing about; it’s not as if there’s, say, a written Constitution providing them a limiting framework of boundaries that constrain what they can do, or not do. /s
Any surprise, then, that people will actually pay appreciable money to watch sports; to see people work hard and follow a set of rules? Not like they’re getting any of that out of their elected Officials.
My working years unfortunately did not include any lucrative paychecks, so consequently I did not pay as much in nor do I draw as much out. The thing is that I’ve managed to get by on it, but if it is cut back, I would tend to take that real personal & am not in a position to get back on anyone’s payroll to take up the slack either. For some, that may be the only way out; to continue to work after normal retirement time. I already did so that puts me several years further down the road age-wise & not in a position to go back to work. If the Democrats were responsible for using Soc. Sec. funds for other purposes, then this should fall on their shoulders. Perhaps they should forfeit their retirements.
How many years till Welfare goes broke?
How many people think a ‘browning population’ will be willing to pay more taxes to support a ‘mostly white’ population ?
you act like anybody has a choice to pay into SS.....for over 40 yrs I donated, against my will.....
You did not read my Comment #51 follow up.
I presume that you and others will vote for Congressional and presidential candidates who will end this bankrupt travesty.
I'm GenX and I will be lucky to break even on the deal. My son will lose money on the whole deal. He will end up paying more in taxes than he ever gets back. Oddly enough, Al Gore (Democrat) tried to change SS to an account type of thing, he called it a "lockbox". Powers made sure he was not elected.
I can't think of a single Democrat program that is sustainable. Not Social Security, not welfare, not green energy, nor the green movement.
Congress only prints money to help democrats and democrats victim groups... so that source is kaput.
I’ve been on SS for thirteen years now. And I am broke.
“Ready for the Soylent Green new deal?”
I like that, can I borrow it?
Voting? What will that change? The dems see my ballot, they’ll “correct” it to their choosing.
Spent: $1,194,842
Revenues: $1,080,304
Seems it is broke by about $100 billion already.
Would restarting the Draft send them back?
Probably not...
Even that’s not a viable solution at this point. Go ahead and do the math and see how much increase in GDP and tax revenue we would need to avoid default in the next 20 years. It’s impossible unless we have something akin to another industrial revolution.
But... if the economy picks up, it could delay the date a little bit, and it could reduce the need for more radical solutions a little bit, but we are still going to need radical solutions.
Well, I paid into the system and will get nothing in return, for absolutely no reason at all. So which is worse?
I wish they would at least let the people who they know will never get benefits stop paying into the system at this point, but they never will, since they need our money to keep the Ponzi scheme going for a couple more years.
“They haven’t tried working solutions for decades, on any problem.”
Yep, it seems government operates on the same principle as modern medicine: never cure the disease when you can make money treating the symptoms.
AOC says we’ll all die first...
I’m just in time. I’ll have only paid in for 20 years by that point.
SS is a ponzi scheme. The money was gone a long time ago.
THERE IS NO “TRUST FUND”. The federal government issues T bills to the SS administration phony trust fund and spends the money. The effin trust fund is a truckload of US treasury notes. Using Uncle Visa to pay off Aunt Mastercard.
In the private sector the CEOs of an accounting firm doing this would be in prison.
Here is another example. In Kentucky the budget has to be balanced. So to finance spending beyond tax revenues the state borrows money. One trick is borrowing from the teacher’s pension fund at interest rates above prevailing rates - as if the rate mattered. The teacher’s fund claims they are getting a great investment return on their money, while the real borrower is the state which is paying interest via tax revenues.
Look at it this way. The state is financing a 1 year budget shortfall with a 20 year note. That is criminal.
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