Social Security Goes Into The Red This Year

[Arrow]

Social Security Goes into Deficit
Mar 25 2010, 11:30 AM ET

Every since the early eighties, when the Greenspan commission kicked the can down
the road with a combination of tax increases and later retirement ages, analysts have
been awaiting the day when the system would finally go into deficit. That date has been
sliding around between 2016 and 2020 for some years now, but the suspense is
finally over: the system is going into deficit this year. " . . . payments have risen more than
expected during the downturn, because jobs disappeared and people applied for benefits
sooner than they had planned. At the same time, the program's revenue has fallen sharply,
because there are fewer paychecks to tax." According to the CBO report from which that article
is drawn, the deficit will persist until around 2014, at which point it will go temporarily back into
surplus before returning permanently to the red in 2018. This is a small but permanent deterioration
of the program's finances--the people who have retired early will pay no more FICA taxes,
and they'll have less in the way of taxable Social Security benefits.


Meanwhile, at a time when tax revenues are already hurting bad, this will force the general fund to
subsidize Social Security, rather than the other way around. This is the canary in the coal mine;
if Social Security's finances are in trouble, Medicare's will also be looking worse. While I was at
the Kauffman Foundation's economics blogger forum last Friday, a show of hands indicated that
about 80% of the people there thought America would have a serious fiscal crisis in the next two decades.
This is how it starts--not with a bang, but with a moderate decline in revenues.This is the canary in the coal mine;
if Social Security's finances are in trouble, Medicare's will also be looking worse. While I was at the Kauffman
Foundation's economics blogger forum last Friday, a show of hands indicated that about 80% of the people
there thought America would have a serious fiscal crisis in the next two decades. This is how it starts--
not with a bang, but with a moderate decline in revenues.

http://www.theatlantic.com/business/archive/2010/03/social-security-goes-into-deficit/38019/

[darrels joy]

If you prefer graphs over words...

Social Security to See Payout Exceed Pay-In This...

[reconeil]

Just like: "The Chairman" or; "His Barackness" & Enforcement Commissariat have already DICTATED; "We The (Schnook$)" and/or The U.S. Taxpayer BAIL-OUT troubled banks, financial institutions, insurers, auto companies & unions,...no doubt The Social Security System will be similarly bailed-out.

Both Employers (HALF Contributors) & Workers (the other HALF) have nothing to worry about.
Just like Current Rulers DICTATORIALLY FORCED all previous troubled large entities be bailed-out with MY/YOUR/OUR and/or U.S. Taxpayer Monies,...I'm sure will be done for all Social Security Monies Contributed Daily by BOTH Employers & Employees.

Sooooooooooooooo,...what's to worry about, Arrow & Joy?
Betcha all-knowing & omnipotent Congressional Queen Nancy Pelosi will handle any Social Security short-falls or problems just as well,...and especially for Obama Ruling Elite?
For We The People? Eh? Tough s--t (as usual)!

Still, wonder if thousands more IRS ENFORCERS will be needed to make this S.S. Rip-Off work out,
just as done for that GRANDIOSE: "Obamacare" Rip-Off currently: "Shoved down our throats?

And, why not? Whose to stop that Corrupt Chicago/ACORN Mob Gone National from dictating whatever The King wants (or not),...anyway? Rham Emanuel, Dodd, Schumer, Sharpton or America's Very Best Financial Wizard Barney Frank????

Neil

[jriley1349]

OK Neil, we know...everytime a democrat speaks, a kitten dies.


Good post, Arrow. It clearly defines the major problem we're facing. When economy crashes, unemployment benefits and early-retirement claims for SS go up - at a time when there's fewer paychecks and tax revenue to pay for those benefits. Unfortunately, politicians in BOTH parties have always done their funding calculations based on rosy predictions for the economy. I'll spare you the examples.

I paid into SS all of my adult life and although I have some 401k and IRA tucked away, I'm also planning (hoping?) to collect social security in a few years as well as utilize Medicare. Other than receiving unemployment compensation once after a layoff (for about 4 months), I've never been a welfare leech. Did my time in the Marines, paid my taxes, put two kids through college, voted, etc. and now I want what I paid into. Like everyone else, I DO resent government waste and those who cheat the system.

That being said, I believe in Social Security/Medicare because I believe the measure of any society is in how well it cares for it's children, sick and elderly. For all the blustering we've heard about Obama and "Socialism" it's worth noting that there are many "socialized" aspects in our society now that we all enjoy and expect: from public schools, to fire/police departments, to road/infrastructure building projects to the military for which we are taxed. Paying into such a system (via taxes) is part of living in any industrialized society and the US has been alone when it comes to public health care.

For those who boast about how "self-reliant" they are and resent paying any taxes, the reality is that, unless you live on your own private island, there are very few of us that are capabile of complete self-reliance when it comes to unexpected health and living expenses - especially for the sick and aged who easily exhaust their life's savings paying for bloated and expensive health insurance or bills.

So the question is...who wants to be first to volunteer to forgo collecting on Social Security/Medicare? I'm sure you could opt-out if you wanted. It's long been known as the third-rail of politics for a reason; mess with it and you cut your political throat. It's not going away... so the next question is, where do we cut cost and waste - not only in SS/Medicare but throughout the government?

Tax cuts have long been the battle cry of the GOP as a means to choke off bloated spending - but it's more of a talking-point than a practice as evidenced by many GOP deficit-financed projects. Spineless Dems champion labor and welfare laws that raise taxes without policing costs. Politicians in both parties are survivalists when it comes to their own necks and always vote in as much pork as they can get to keep constituents happy.

I don't know the answer about fixing government. Manipulation of media and public opinion for a distracted citizenry has been fine-tuned to a science. Read, keep your mind open and vote your conscience for who you think are the good-guys and hope they turn out that way.

[reconeil]

No one can ever say that you don't know your stuff.
Acknowledging that: "Everytime a democrat speaks a kitten dies", was truly quite profound.

Still, what does anyone boasting about being: "Self-reliant" have to do with We Americans
being Daily Dictated by TOTALLY CONTROLLING (from top to bottom) Chicago/ACORN Mob
or Gang now gone national and/or now TOTAL RULE by: "Democrat/Socialist/Leftist Political Supremacist Rulers posing as Liberals"?

What turned out a failure in Russia will no doubt fail eventually here too.
HOPEFULLY,...such a failure won't-take-damn-near-as-long HERE?

Also hope We Americans don't suffer Political Opposition Gulags either?
Thugs Scaring-Away Opposition to Obama from polls during last election,...was bad enough.

Neil

[MORTARDUDE]

The Social Security and Medicare money deductions go into giant Ponzi scams, the biggest in history. Your hard earned F.I.C.A. deductions go into the general revenue stream and are spent on God knows what. All that is left are IOUs in Parkersburg, W VA ( Bureau of the Public Debt ). What happens when China stops buying our debt ? Whoops !! Game up. Do the research.

http://www.factcheck.org/social_secu...rotection.html

"....As recently as 1950 there were 16.5 workers paying Social Security taxes for every one person receiving Social Security benefits, according to statistical tables published annually as part of the Social Security trustees report. Currently, there are 3.3 workers paying in for every one beneficiary receiving benefits, and the situation will worsen dramatically when the post-World War II "baby boom" generation begins reaching age 62 -- the age when many choose to begin receiving early retirement benefits -- in about three years.

And just as the ad says, within 15 years that ratio is projected to decline to 2.2 workers paying in for every one person getting benefits. And it is forecast to continue declining to 2.0 workers in 2040, when workers who are now in their 20's reach retirement age.

That's a pretty solid projection -- All those who will receive benefits in 2040 have already been born and counted. Changes in projected life expectancies, immigration rates or birth rates could throw it off some, but not much, and not soon. The projection uses "intermediate" assumptions, but even under a "low cost" set of assumptions (birth rates 13% higher, improvements in life expectancy slow by half, and immigration increases 44%) each of today's young workers would have only 2.4 workers supporting them at retirement in 2040. Either way, the system faces an enormous financial crunch...."


"....That's right -- except that workers who pay into Social Security are supporting not only "retirees" but also are supporting millions of disabled workers and surviving dependents. To be strictly accurate the ad should have said "beneficiaries" instead of "retirees...."


"Enormous financial crunch..." We are there NOW. Baby Boomers born in 1946 are turning 64. Next year they will hit Medicare. All of the above, coupled with the enormous budget deficits ( When Clinton left office there was a surplus...remember ? ) created under the 8 years of Bush's years, make it IMPOSSIBLE to continue what we are doing. Time to FLUSH CONGRESS in 2010 !!!