“The American people will never knowingly adopt Socialism. But under the name of ‘liberalism’ they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened.”

Socialist Party presidential candidate Norman Thomas


Thursday, January 27, 2011

Social Security crash starts this year, not in 2016

It's news to only the stupidest of Americans that politicians have been lying to us for decades about social security. The nonpartisan congressional budget office announced today that the SS deficit starts this year, not 5 years down the road like we've been told......

From CBSNews -- (AP) Social Security's finances are getting worse as the economy struggles to recover and millions of baby boomers stand at the brink of retirement.

New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037.

This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday.

I got my annual SS statement last weekend that projects what I would be getting each month at various points in retirement, more if I delay retiring and less if I retire at 59 or whatever. I had to chuckle at the lie that was staring me right in the face. If I decide to retire at 65, I am promised something like $3,000 a month in SS benefits. But that's 17 years away. Is there anybody dumb enough to think that if SS is sinking fast this year that there will be anything left when I get there? The year of complete insolvency for SS is projected to be 2037 but with baby-boom voters retiring with massive senses of entitlement to all that money and the implied threat to kick anybody out of office who dares suggest a cut in benefits, there won't be anything for me when I get there. Heaven help my kids...it'll be even worse for them.

4 comments:

Bill Lockhart said...

Don't worry. they will do something idiotic and irresponsibile to save it.

Ed said...

Yeah, like raising the taxes they steal from our children to pay our SS benefits. We are already down to 2 workers for every 1 person receiving SS benefits. And with unemployment being so high, the date of deficit spending is now. This makes me want to apologize in advance to my two boys for forcing them to essentially work for my benefit, rather than their own, for the rest of their lives. It is criminal what politicians have done on our behalf to buy votes.

JoeTheEconomist said...

I think that your article misses the larger point. The Trust is largely irrelevant to Social Security.

The Trust provides little economic support to the system. In 2009, it earned about 100 billion which is a fraction of the total expense. That fraction is shrinking because the number of retirees is rising and the Trust is being invested in lower yielding security (thanks Ben). Social Security lives on payroll taxes without which the system goes belly up whether there is a trillion dollars in the Trust or not.

The real problem is return on contribution and the way that the trust is invested. We have a solution because we don't worry about the trust. We focus on risk and return. If you bring those into balance the system works. It isn't a good deal but it is what you paid for.

www.fixssnow.org, tell me where we are wrong.

JoeTheEconomist said...

Here is the other thing that you are missing. You think that you will get nothing. I suspect that you will wish for nothing when the system is finally abandoned.

The problem isn't the number of workers per retiree. The bigger problem is workers per (debt load + retiree). Right now there are 3 workers per retiree + $300,000 in debt. The debt is getting bigger, and interest isn't getting cheaper. So we have to pay for retirees in post-interest expense.

At some point the working generation is forced to pick between the supporting the debt or the seniors who created it as younger and terribly irresponsible voters. My guess is that the seniors are outnumbered 2 to 1, and the younger generation says thanks for the debt good luck on the ice floe.

At that point you will get to pick which in-law gets to live with you and you will wish that you had gotten nothing from Social Security.

Solution : Www.FixSSNow.Org, tell me where we are wrong...