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Social Security Expected To Go Broke Sooner

From an unfazed Associated Press:

Social Security’s finances weakening, thanks to rough economy, high energy prices

Published: Tuesday, April 24, 2012

WASHINGTON — Social Security is rushing even faster toward insolvency, driven by retiring baby boomers, a weak economy and politicians’ reluctance to take painful action to fix the huge retirement and disability program.

Of course Mr. Obama’s vaunted payroll tax holiday extension, which cut the only funding for Social Security, has nothing to do with this.

The trust funds that support Social Security will run dry in 2033 — three years earlier than previously projected — the government said Monday.

There was no change in the year that Medicare’s hospital insurance fund is projected to run out of money. It’s still 2024. The program’s trustees, however, said the pace of Medicare spending continues to accelerate. Congress enacted a 2 percent cut for Medicare last year, and that is the main reason the trust fund exhaustion date did not advance.

And yet we heard no screams of outrage about Medicare being cut by 2 percent. Why is that?

The trustees who oversee both programs say high energy prices are suppressing workers’ wages, a trend they see continuing. They also expect people to work fewer hours than previously projected, even after the economy recovers. Both trends would lead to lower payroll tax receipts, which support both programs.

And, once again, the AP ignores the cut in the FICA tax which funds Social Security.

Unless Congress acts — and forcefully — payments to millions of Americans could be cut…

"Lawmakers should not delay addressing the long-run financial challenges facing Social Security and Medicare," the trustees wrote. "If they take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare."

However, the trustees do find the time to viciously attack anyone who actually comes up with a plan. (Cf. Paul Ryan.) Meanwhile, they do nothing.

More than 56 million retirees, disabled workers, spouses and children receive Social Security. The average retirement benefit is $1,232 a month; the average monthly benefit for disabled workers is $1,111…

And never mind that the number of people claiming disability has skyrocketed by more than 53% in the last ten years, thanks primarily to the governments intentionally lax requirements.

Potential options to reduce Social Security costs include raising the full retirement age, which already is being gradually increased to 67, reducing annual benefit increases and limiting benefits for wealthier Americans.

Policymakers could also increase the amount of wages that are subject to Social Security taxes. Social Security is financed by a 6.2 percent tax on the first $110,100 in workers’ wages. It is paid by both employers and workers. Congress temporarily reduced the tax on workers to 4.2 percent for 2011 and 2012, though the program’s finances are being made whole through increased government borrowing

What do you know? The AP finally got around to mentioning Obama’s contribution to the problem. Naturally, they only mention it in passing. But thank goodness we can borrow the money from the Chinese, with interest.

Social Security is split into two funds — one for retirement and survivor benefits and one for disability. The retirement fund is projected to run out of money in 2035 while the disability fund is projected to run dry in 2016. Combined, the two funds will last until 2033

Even 2016 is still after the elections in November. So who cares?

On Monday, Treasury Secretary Timothy Geithner called Social Security and Medicare the "twin pillars of retirement security in this country," and he declared, "It is critical that reforms are slowly phased in over time so current beneficiaries are not affected and future beneficiaries do not experience precipitous changes." …

Too bad he doesn’t have a plan to deal with the problem.

The trustees who oversee the programs are Geithner, Social Security Commissioner Michael J. Astrue, Labor Secretary Hilda Solis and Health and Human Services Secretary Kathleen Sebelius. There are also two public trustees, Charles Blahous and Robert Reischauer.

Isn’t it reassuring to hear that Geithner, Solis, and Sebelius are the Social Security Trustees? What do we have to worry about?

Meanwhile, we have this further tidbit on Mr. Geithner’s future via the New York Post:

Geithner kin has big mouth

Tim Geithner’s father-in-law indiscreetly boasts the Treasury Secretary has an agreed exit strategy out of Washington

April 24, 2012

… Food critic Albert Sonnenfeld, whose daughter, Carole, is wed to the country’s top money man, stunned strangers at Bar Boulud Thursday night when he claimed President Obama’s nomination of Dartmouth College president Dr. Jim Yong Kim to head the World Bank was part of a plan to allow Geithner to take over the Ivy League school’s top post, reports The Post’s Jeane MacIntosh.

“That’s why Obama nominated [Kim] for the World Bank — so that there’d be an opening,” Sonnenfeld claimed to a dinner companion at the eatery’s communal table.

Seated with five other couples he didn’t know, Sonnenfeld indiscreetly claimed Geithner has since changed his mind. “They offered him the presidency of Dartmouth. But now he doesn’t want it,” said the gabby granddad. “He wants something else.”

Sonnenfeld quickly turned the chat to Geithner. “My daughter is, of course, married to Tim Geithner,’ and followed with, ‘He’s stepping down at the end of the year, after the election,” recounted the diner.

Sonnenfeld also let slip that Carole Geithner “can’t wait to get out” of DC because “she has to hold her nose and entertain all these Republicans.” Sonnenfeld added, according to the witness, “Some of them she actually liked, like Jim Bunning from Kentucky. But now he’s gone. Can you imagine having to entertain John Boehner and his wife, with his fake tan?”

Poor ‘Turbo Timmy.’

It must be tough for him and his wife having to put up with those horrible Republicans.

This article was posted by Steve Gilbert on Tuesday, April 24th, 2012. Comments are currently closed.

7 Responses to “Social Security Expected To Go Broke Sooner”

  1. BigOil

    What trust fund? All we have is an IOU from a federal government that prints money to cover an unsustainable debt.

    Even the coercive backing of the federal government cannot sustain this ponzi scheme.

  2. GetBackJack

    Of course. Just as I age enough to finally get paid a pittance of what I’ve been forced to give them …

  3. JohnMG

    …..”It must be tough for him and his wife having to put up with those horrible Republicans…….”

    It must be tougher putting up with your in-laws. You can pick your friends, and you can pick your nose………but you can’t pick your relatives.

  4. AcornsRNutz

    Sorry to those of you who are older than myself and have a lot more cash in the SS scam, but I say let it go broke, and when it does just stop paying. It is a horrible, repulsive, vile ponzi scheme foisted on a bunch of people who still had faith in the government at a vulnerable time in our history. But a scam it remains. I say we do this. End benefits for anyone not currently on SS starting in say….2015. Then you can claim what you have paid into SS so far in your life as a credit towards tax debts for the rest of your life at perhaps a maximum if 20% of what you have paid each year. Let the program die on the vine. Sounds fair to me, ifyou are 64 and have been paying your whole life you will no longer get that whopping check for some piddling amount as a so called “benefit” but you may end up paying almost no taxes for the next 10 years. Which would you prefer? Take that money you save and invest it an..holy smokes! The economy starts to rebound with your money not some imaginary stimulus, people start hiring more people get jobs and poay income tax, revenue goes up, and the only money the government lost was money fund Social security, which is no longer an issue. What do ya think?

    • mr_bill

      Agreed. Let it go broke. I won’t raise a ruckus about not getting any of my money back, if I don’t have to pay any more into it.

      No more borrowing. If the disability fund runs out of money in 2016, end it. Send a letter to each recipient with their last check. The letter should explain that due to poor management, fraud, and laziness, the program is ending. To paraphrase Ross Perot, there will be a “giant sucking sound” caused by all the illegal immigrants leaving after receiving this letter.

    • Petronius

      We are currently borrowing money from China to pay Social Security and Medicare benefits.

      If there is anybody in government who understands the folly of this policy it should be the Secretary of Treasury, Tim Geithner. But alas! –– tiny Tim has nothing to say on the matter.

      Social Security was in the black until fairly recent times but has become swamped by disability claims. Disability claimants are not seniors; rather they are chiefly working-age immigrants –– in other words, this is a crisis that we have imported via open borders. In addition, the baby boomers are now retiring at a rate of 10,000 per day, and this will add to the deficit going forward.

      The shortfall in Medicare is much greater. Currently China is supporting about 40% of our Medicare payments.

  5. Astravogel

    What was it the gal astronaut said to the kid who wanted
    to become one? Something about learning Chinese or Russian…?


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