Social Security deficits now ‘permanent’

An interesting article from The Washington Times

Social Security will run a permanent yearly deficit when looking at the program’s tax revenues compared to what it must pay out in benefits, the program’s trustees said Friday in a report that found both the outlook for Social Security and Medicare, the two major federal social safety-net programs, have worsened over the last year.

Medicare’s hospital insurance trust fund is now slated to run out of money in 2024, or five years earlier than last year’s projection, while Social Security’s trust fund will be exhausted by 2036, a year earlier than the prior projection.

The trustees stressed that exhaustion of the trust funds doesn’t mean the programs will stop paying all benefits. Social Security could fund about three-fourths of benefits past 2036, and Medicare could pay 90 percent of benefits past 2024 under current trends.

The figures come as Congress and President Obama are wrestling over whether to make major changes to the entitlement spending, and Republicans said the new projections should force the debate to turn in their direction.

“Today’s report makes it clearer than ever that doing nothing is not an option. The failure to act means current as well as future beneficiaries, will face significant cuts even sooner than previously estimated,” said three top House Republicans on the Ways and Means Committee, which oversees both programs.

I put this in Political Madness as this is a REAL economic problem. And if both sides don't come together to find real solutions to Medicare and Social Security reform, things will get very bad in the next 20 years as the US' aging population starts to retire.

Thoughts?

~Keeper

My only thought is...

This scares the crap out of me...

Then i go back to "things always turn out in the end"

Or... Will they...0.o?

I will be retirement eligible in 2024 and eligible for social security in 2029 and have been paying into this system since I was 15 years old - for what?? 75% of benefits?? How do I opt out of paying any more of the 25% I won't be getting back? Man, this really burns me up. Why would I ever choose to pay for something in whole, with an expectation that I will get less than what I paid for? My generation has really been jacked around. We've paid for the baby boomers to retire at 50. We've paid for our kids' educations with ridiculous inflation in tuition. We'll be paying again for our parents when they need help. And just when we reach retirement, nobody gives a snip about us, we get to take the hit and lose out on what we have paid for ALL OUR WORKING LIVES! Generation X middle class is being throttled slowly but surely and we are the ones who have paid for everything for everyone else. I'm about fed up enough to drop it all and go live off the grid somewhere, but of course I won't because I am a responsible parent and still have 3 more years of college tuition to pay for my kid to graduate. I guess we just get to suck it up and take it once again. I sure hope SOMEONE appreciates all this.

Scary for sure.

I am worried if it will be around/depleted by the time I reach eligibility.

What trust fund?? The money was spent, it was there!

Social Security was one of the actual government sponsored social services that worked very well... that is until the government began dipping into it. You put a certain amount into SS with the expectation that you get back what you had put into it. The money you invested would be right there for you in a safe and secure government depository free from Congressional meddling... but they had to fund the wars and bloated government somehow.

Now we have a populace which has all been required their entire working life to invest into the system only to learn that now they may get back only 75% of their forced investment if any at all. Right now Social Security would be perfectly solvent if you got back exactly what you put in without anyone dipping into it.

i feel sorry for people who think social security is going to be there for them when they need it.

the fact is there is no money there they only money that social security has is what the current workforce pays into it and if thats not bad enough its gone as soon as it gets there.

that is the biggest reason i was an advocate of privitazation of social security they cant steal it and if they insured the account like they do with bank accounts up to 100k that would have worked for me.

i have news for you people and one day you will see the truth of the situtation once you retire you are in for a rude awakening that your social security income is no where near what its going to take to live on.

both my parents are retired both draw their social security and its still not enough to pay the bills and my mother still works even now shes over 70.

really that is some golden years and enjoying life.

what i tell most people is not to depend on social security and invest in other things like 401s and iras.

the more eggs you have in your retirement basket the better off you will be.

another fact remians of any government program at any time for whatever reason whatever they chose to give you can also be taken away at any time.

The government should have never stolen their money in the first place.

The people who payed into the system should file a lawsuit or something against them.

reply to post by tothetenthpower


Live free die young!

Is the fact that social security is in danger of going "bankrupt" a temporary thing that will sort itself out in the end and a sign that things are heading in the right direction?


I always thought that money given into Social Security was invested on your behalf and that that investment was paid back to you at a later date sort of like forced responsibility. I figure they do a similar thing with the tax returns. They make you save money involuntarily so that you're guaranteed some at the end of the year to make big purchases like cars and such. I'm fairly certain that I was wrong on the Social Security issue. The money that you "invest" is taken and paid out to the people currently collecting on Social Security. It's already gone.

As long as there are more people working than "retired", social security should be in the black.

How is the fact that SS is failing good sign?

Not too long ago during the "baby boom" people were having a huge amount of baby's. Now, people are behaving more responsibly and having fewer babies. Therefore, there are soon to be many more retired people than people currently paying into social security. After the baby boomers die, then things should sort themselves out.

( I say this like I know what I'm talking about, but I'm really just talking out of my proverbial butt)

reply to post by neo96


Right, so here I have wasted my money all these years, and I have 14 more to my retirement, since I know RIGHT NOW that I am not going to get more than 75% back out, I want to know how the heck do I opt out? This is obviously a losing proposition! I shouldn't be forced to pay any more into it, should I?

reply to post by gwynnhwyfar


see there is the evilness of the situtation you cant do anything

and no you shouldnt be paying into something that your not going to get anything out of.

thank fdr and the democrats to that gun agianst your head.

reply to post by neo96


How I love flushing perfectly good money down the toilet hole.

I don't think you can just blame democrats though - how did you draw that conclusion?

I hope the entire thing runs out so people will learn how bad socialist programs are. However, they will try and keep it alive and milk it for all its worth, just like there are zombie banks this will become a zombie program, an issue of national security to keep it alive, raise the debt limit or the terrorists win, bla bla, etc, etc.

reply to post by filosophia


I'd beg to differ.

Social programs are only as good as the the people running them my friend.

Public Education is a socialist program, and I bet Americans would be up in arms if the government decided it would all be privately run.

This isn't about socialism it's about government actually sorting out it's problems and providing quality services to it's citizens.

~Keeper

This article is ridiculous, because it assumes the impossible. The situation is far, far worse than it suggests.

There is no trust fund - nothing - ZERO dollars exist saved to pay out SS or Medicare. Anyone that tells you otherwise is a boldface liar.

The only reason SS and Medicare is still able to pay out fully NOW is the US government currently is able to borrow 1.5 trillion yearly to cover funding costs. The federal government is borrowing over 40% of the money it is spending NOW.

The costs of Medicare, Social Security, welfare and Medicade are greater than all tax dollars received NOW, not 20 years from now. That means without borrowing there is no money left for defense, or anything else.

We have had our national debt grow from 9 to 14 trillion in the last 4 years, with no end projected in sight. Medical costs have gone up 100% in the last decade and show no signs of slowing down.

If you really believe the US gov will continue to be able to borrow 40%+ of its budget for another 20 years, well you are at best incredibly ignorant and at worst a complete moron.

You should not be asking if SS and medicare will be around in its current form in 20 years it WON'T. You should be asking will it be around next year.

Originally posted by Rockdisjoint
The people who payed into the system should file a lawsuit or something against them.

There's probably no grounds to sue. Technically, its collected as a tax, the FICA tax, and unfortunately, they can spend taxes in any manner they want. The Supreme Court has, in the past, determined that you have no actual property right to benefits from Social Security (Fleming vs Nestor).

reply to post by gwynnhwyfar


social security came about from fdrs new deal where i personally lay most of blame

however the line of presidents who have dipped their hands in that cookie jar of social security extends to both sides of the aisle which your right it was more than just one side.

it goes with the territory and program that was given that much power was doomed from its inception to be corrupted.

hence the nature of the governmental beast.

Here's an idea.

Take 50 billion from the defense budget and put it into Social Security. Unless someone steals from it again (like Regan), all should be fine.

This is only a big issue because the Gov will not allow for defense budget to be cut. Total BS. End of story.

Originally posted by spinalremain
Take 50 billion from the defense budget and put it into Social Security. Unless someone steals from it again (like Regan), all should be fine.

$50 billion is a drop in the bucket. The government is running a deficit of well over 20 times that amount. Social Security alone has a budget of around $700 billion. Add medicare and medicaid and you're up around $1.3 trillion.

If it were that easy to fix, it would have been done long ago.

In reality, there are only three ways to solve the problem (or rather, kick it down the road for a future generation, as they always do), and eventually, Congress will take some combination of the following steps:

-Raise FICA taxes
-Raise the 'retirement' age
-Reduce benefits

There's no painless way out of it, and the declining ratio of workers to retirees means that we'll eventually have to deal with this again, even if we save the program from its current crisis.