Entitlements: Social Security, is running deficits decades earlier than expected. We’ve been kicking the can down the road. We’re out of road.
USAToday: Social Security’s annual surplus “nearly evaporated” for the first time in a quarter-century last year. The program is poised to be in the red for the next two years; between 2008 and 2009, it saw a revenue decline of $60 billion.
Meanwhile, with the retirement of many in the “Baby Boom” generation imminent, regular annual losses are expected beginning in 2016. Republican Rep. Paul Ryan of Wisconsin, the highest-ranking Republican on the House Budget Committee, says the program’s “moment of truth has arrived.”
IBD: As Bernie Madoff found out, any Ponzi scheme depends on a continuous inflow of new cash and new customers or the ever-expanding pyramid will totter and collapse. Social Security, dependent as it was on new workers paying the expanding benefits of retirees, is about to, much sooner than expected.
As Ed Morrissey over at HotAir.com reminds us, Peter Orszag, now director of the Office of Management and Budget, predicted as director of the Congressional Budget Office in August 2008 that no one needed to worry about Social Security. “CBO projects that outlays will first exceed revenues in 2019 and that the Social Security trust funds will be exhausted in 2049,” we were told.
As the baby boomers have started retiring and the economy has collapsed, that day of reckoning is here. The Social Security Administration’s Office of the Chief Actuary finally got around to posting detailed November numbers, and they aren’t pretty.
The combined OASDI (Old-Age Survivors and Disability Insurance) “Trust” Funds recorded a nearly $6 billion primary deficit for November, the worst monthly performance since records began in 1987. The 12-month OASDI primary surplus was only $9.598 billion, also the worst 12-month performance on record.
Only the fact there will be no cost-of-living increase in 2010 may save OASDI from running a primary deficit this year. But continued economic doldrums coupled with the economy-killing socialization of health care, higher taxes, rising deficits and the still-looming catastrophe known as cap-and-trade may cause our house of Social Security cards to collapse long before sea levels begin to rise.
When you consider just disability income (DI), the picture looks even bleaker. For the 50th straight month, going back to October 2005, the DI Fund ran a yearly deficit, this time a record $21 billion.
At least one part of Orszag’s prophecy is coming true: “Social Security’s revenues each year are greater than its outlays, but as the baby-boom generation (people born between 1946 and 1964) continues to age, growth in the number of Social Security beneficiaries will accelerate, and outlays will grow substantially faster than revenues.”
That trend has accelerated to the point of collapse.
Private, insurance company-run annuity plans are legally required to pay you what was promised, when it was promised, and to maintain assets sufficient to redeem those promises. Social Security is not. Any insurance company CEO that ran a Ponzi scheme like Social Security would soon be incarcerated for fraud.
Opponents of the partial privatization proposed by President George W. Bush cited the variability in the stock market as a looming disaster and probably would say “I told you so” considering the recent market troubles. But at least retirees would still have real money, their money, in real accounts. They wouldn’t be dependent on government IOU’s and the hoped-for contributions of others.
We have a looming disaster on our hands.
Social Security has been called the “third rail” of American politics. Well, this train is running off the rails, and someone better touch it before momma gets thrown from it.
And this from The New York Times: One sound approach would be to link benefit levels to life expectancy, so that as people live longer, future benefits would be modestly reduced while payroll taxes that support Social Security would be modestly increased.
A nice way of saying, less Benefits, more taxes.
I personally have never regarded Social Security as anything other than a Tax.
And when liberals attack me on Social Security for being “socialist” so I’m a hypocrite, I just say back to them: Give me all the money you stole from me and never do it again and I will be happy.
I will succeed or fail on my own merits.
I never get a response to that.
And thus the shouting match continues as the trail derails as to whether it is even derailing to begin with then what to do if it does or how to prevent it if it does, but will it?
Meanwhile, The President proposes to increase the money taken from my paycheck.
And I don’t even make over $250,000 a year… 😦