Social Security running in the red earlier than expected

According to this, Social Security is currently, and likely will continue to be, in the red – paying out more than it takes in. Various past estimates had this happening anywhere from 2017 to 2037. FAIL.

“The longer you delay, the harder it will be,” said Ron Gebhardtsbauer, who heads the actuarial science program at Pennsylvania State University. “Congress fiddles while the budget burns.”

Fixing Social Security inevitably involves raising taxes and cutting future benefits, and that’s the problem. Doing one and not the other would fail politically, and no fancy new gimmick can take the place of those hard decisions.

Only one group of Americans can expect to feel no pain: During the failed effort to reform Social Security in 2005, all sides agreed that current beneficiaries and those on the verge of retirement would be protected. So the 55 and older crowd can count on getting paid in full, at least with more confidence than younger Americans.

Congress last reformed Social Security only as it was going broke in 1983. That legislation has raised much more money than the system has been spending. So even though Social Security will run in the red again this year, it won’t blow through the $2.5 trillion “trust fund” it has amassed for a long time — 2037 at the latest.

One of the biggest problems with the last paragraph is that there is no “trust fund” – congress folded it into the general budget back in the 60’s. The fund is nothing more than a bunch of IOUs backed by government securities that we can’t sell to the Chinese or anyone else.

This is not something that just sprung up out of nowhere – it has been known for a long time that Social Security, along with Medicaid and Medicare, are destined to go belly up.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: