I have met Tom Savings at a week long SS seminar sponsored by CATO. He is a stand-up guy who knows more about Medicare and SS than any person I have ever met. He has been on the SS Board of Trustees for a long time. He is for personal accounts and makes no bones about the fact that SS is a pay as you go system and that the SS Trust Fund is a charade. So I would pay attention to his "mumbo jumbo" because he knows what he is talking about.
If they really want to fix this problem, what they've got to do is increase the number of doctors and other healthcare technicians at a more rapid rate. The growth in the number of doctors and technicians is not keeping up with the demand, even at the suppressed levels of demand we've got.
And where does the money come from to pay for their services? Our ERs are being inundated by the uninsured, many of them illegal immigrants. There are more than 50 million on Medicaid, which is bankrupting the states. Couple this with the baby boom cohort, which will be retiring in a few years and you have a real crisis.
The truth, though, is that both social security and medicare are headed for the ash heap of history. It's too late to fix them.
I fear it will be the US that goes to the ash heap of history because of these systems. The Dems and their allies like AARP are committed to keeping the systems in place, tweaking and expanding them until they bankrupt the country. The entitlement programs, according to David Walker, GAO, represent more than a $65 trillion unfunded liability. They are on automatic pilot in terms of the budget with formulas dictating benefits.
48 million Americans receive Social Security benefits, including 33 million retirees, 7 million survivors, and 8 million disabled workers. By 2030, there will be 70 million Americans of retirement age--twice as many as today.In 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2.
The SS "surplus" starts declining next year and by 2017 Social Security will begin running a deficit. The last time this happened, in 1983, the Dems and Reps struck a bargain with the devil signed by Ronald Reagan, that increased taxes and decreased benefits, including raising the retirement age for full benefits to 67. I believe something similar is going to happen after 2008, with both parties kicking the can down the road again rather than take the tough decisions to solve the problem. And each time they kick the can down the road, the problem gets even worse and more difficult to solve.
The SS "surplus" starts declining next year and by 2017 Social Security will begin running a deficit. The last time this happened, in 1983, the Dems and Reps struck a bargain with the devil signed by Ronald Reagan, that increased taxes and decreased benefits, including raising the retirement age for full benefits to 67. I believe something similar is going to happen after 2008, with both parties kicking the can down the road again rather than take the tough decisions to solve the problem. And each time they kick the can down the road, the problem gets even worse and more difficult to solve.
The solution may be as simple as returning the system to actuarial soundness. The problem is people are living too long compared to when it was begun. There is a retirement age that would restore the 16:1 ratio again. Whether that is politically possible, I cannot say.