It is an article of faith among many that entitlements are destroying the federal budget and that Social Security is a big part of the entitlement monster. That may be true of Medicare, but Social Security? Take a look at this chart from the New York Times. Does it look like Social Security is threatening to wreck the federal budget? By the way, the author does make one big mistake. Social Security is not off budget. It should be and probably will be in the not too distant future, but it isn't now.
8 comments:
I'm a simple man,but,in my opinion,the problem with social security is the failure to collect proper taxes from the wealthy.
That is one ugly chart.
Most people who keep up with current events know that the Social Security "crisis" was created to privatize the funds and put social welfare money into the stock market where rich people could gamble with it. It would have happened, too, if old people didn't vote so much :D
"Most people who keep up with current events know that the Social Security "crisis" was created to privatize the funds and put social welfare money into the stock market where rich people could gamble with it."
What are you smoking? The problem is that there are not enough people paying into the system to support the benefits being paid out. I don't know the figures, but I think it was something like 12 people paying into the system for every person receiving benefits at one time Now it's 1 or 2 people paying into the system for each person receiving benefits. People are living way longer than they did when the program started, so each person receives a lot more than they ever paid into the system.
I'm "smoking" the Trustees Report. SS has been running a surplus for decades. If "fiscal conservatives" actually knew anything other than how to raise campaign donations, they wouldn't have wasted the surplus on other government programs. So while there may be problems looming in the future, it's not because of inherent problems in the SS insurance structure, it's because of inherent problems with politicians' brains.
This chart appears to be consistent with the average American lifestyle, in which "work" and "war" are prominently featured.
See trust fund ops. for most recently ended quarter (ending 9-30-09) - http://www.socialsecurity.gov/OACT/ProgData/assets.html - from the tone of your note, no saj, you may be astonished to see that SS ran an $11B deficit in that quarter...
Tide has begun to turn, sharply, if not just yet for all the reasons Anon 9.01Feb.3 mentions, then for what is projected to be a very protracted period of un/underemployment (pressure on the inflow side). And the long-term trend of an ever-falling payer to beneficiary ratio cited above certainly amplifies the short term (and net) impact that a bleak economy will have on Trust Fund balances.
And in an environment where claims filed are up and agency adjudicators are under pressure to move cases as quickly as possible to work down pendings, it is likely that allowances will increase (because they're much faster to process than denials), which will also put additional pressure on the benefit outflow side....
So there's negative pressure on SS income, and positive pressure on SS outgo... uh oh.
Fun doesn't stop there...there's that dirty little secret about those special social security debt instruments that the Treasury holds... You know, the IOUs the Treasury spots the TF's to fund current general governmental operating expenses (so sad!). Yeah, about those...there's no money at the Treasurey to pay the Trust Funds back!
Not that the money's needed today (though the quarter ended 9-30 sure does start ya thinkin'...), but has this country ever 'saved' in the modern era for anything? Yes, we would literally have to save between now and then, or borrow from someone to pay back money we've already borrowed from the Trust Funds....
Someone remind me, what's that debt "ceiling" up to today??? I think the 'trusted' Congress voted to dig our children about 1,500,000,000,000 dollars deeper into an already 12,600,000,000,000 dollar deep hole.
Were there other relevant current events that I missed, no saj?
On top of all this Medicare is in worse shape.
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