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Report on Social Security and Medicare could be bleaker (Lock-box surplus down 95%)
KOAA ^ | 5/12/09

Posted on 05/12/2009 6:07:48 AM PDT by Libloather

Report on Social Security and Medicare could be bleaker
Story By: Associated Press
Updated Tue May 12, 2009, 06:44 AM MDT

Analysts say today's release of a report card on Social Security and Medicare won't be anything to celebrate. Analysts think this year's trustees' report will project the two trust funds will run out of money sooner than projected a year ago, thanks in part to the worst recession in decades and resulting high unemployment.

The economic downturn has resulted in a loss of 5.7 million payroll jobs since it began in December 2007 and an unemployment rate that hit a 25-year high of 8.9 percent in April. Fewer people working means less money paid into the trust funds for Social Security and Medicare.

(Excerpt) Read more at koaa.com ...


TOPICS: Crime/Corruption; Extended News; Government; News/Current Events
KEYWORDS: genx; healthcare; medicare; socialsecurity; surplus
Nothing to see here. Can we PLEASE move on with the gubmint running health care?

Actual numbers are supposed to come out @ 2:30 this afternoon.

1 posted on 05/12/2009 6:07:48 AM PDT by Libloather
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To: Libloather

B-b-b-b-but Clinton ran a surplus all 8 years! Either that, or he was including social security receipts in the general fund. One of those two, I forget.


2 posted on 05/12/2009 6:09:17 AM PDT by domenad (In all things, in all ways, at all times, let honor guide me.)
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To: Libloather

Last week some Freeper laughed at me for suggesting we are very likely in a depression, though we just don’t have the published figures yet.


3 posted on 05/12/2009 6:09:25 AM PDT by anniegetyourgun
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To: Libloather

Guess it’s time to fix up the spare room for my elderly mother-in-law....sigh.


4 posted on 05/12/2009 6:13:04 AM PDT by ladyvet (WOLVERINES!!!!!)
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To: Libloather

Can’t anybody in government see this is a problem? We need to tax and spend more to dig out of the SS, Medicare, Medicaid hole... Barry to the rescue...


5 posted on 05/12/2009 6:14:14 AM PDT by uncommonsense (liberals see what they believe and conservatives believe what they see)
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To: uncommonsense

but...but....but....

my Congressman Andre Carson (Muslim, IN) said he would make Social Security “safe for seniors”

how could this be?


6 posted on 05/12/2009 6:15:52 AM PDT by nascarnation
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To: Libloather

Sheesh, every 5th grader knows that the proper way to say it is ‘more bleaker’.


7 posted on 05/12/2009 6:17:35 AM PDT by perfect_rovian_storm (The worst is behind us. Unfortunately it is really well endowed.)
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To: nascarnation

Andre lied to you. He knows it. Now you know it.


8 posted on 05/12/2009 6:18:51 AM PDT by muawiyah
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To: Libloather
Congress spends the accumulate funds in the social security raid once a year.What is the lock box?
9 posted on 05/12/2009 6:19:02 AM PDT by mountainlion (concerned conservative.)
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To: anniegetyourgun

Last week some Freeper laughed at me for suggesting we are very likely in a depression, though we just don’t have the published figures yet.
////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Once again it has been made obvious to you as well as to me that being a Free Republic member, in and of itself, does nothing to raise a person’s intelligence level. I would have asked why you said very likely, I consider it a foregone conclusion, anyone who laughs at the thought is living in dreamland.

My only question is whether it is a depression, which implies a recovery at some point or an engineered descent to a lower level plateau, the latter is looking more and more likely.


10 posted on 05/12/2009 6:22:21 AM PDT by RipSawyer (Change has come to America and all hope is gone.)
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To: Libloather

This is a prime example of the government “investing” our money for us, not to mention the fact that government entitlements will fail.


11 posted on 05/12/2009 6:22:38 AM PDT by Toespi
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To: Libloather
. Analysts think this year's trustees' report will project the two trust funds will run out of money sooner than projected a year ago,

The trust funds don't exist anyway except in the same computer system that the Fed uses to print money.

12 posted on 05/12/2009 6:23:35 AM PDT by dirtboy
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To: Libloather
SS is a pay as you go system. The SS Trust Fund contains non-market T-bills and represents a liability, which is why the SSTF is included in the national debt under Intragovernmental Holdings. SS will start going into the red in 2017.

The funny part is that the smaller SS surplus is actually making the national debt increase at a slower pace than would be the case if the revenues were not decreasing.

13 posted on 05/12/2009 6:32:46 AM PDT by kabar
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To: qam1; ItsOurTimeNow; PresbyRev; Fraulein; StoneColdGOP; Clemenza; m18436572; InShanghai; xrp; ...
Xer Ping

Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.

14 posted on 05/12/2009 6:50:27 AM PDT by qam1 (There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)
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To: Libloather

“Trust funds?!” “Run out of money?!” There are undoubtedly still a great many who believe that SS funds (that is, Social Security. Given the Hussein administration one must be clear) are somehow separated from the rest of the money confiscated by Big Brother each year.


15 posted on 05/12/2009 7:09:05 AM PDT by Oldpuppymax (AGENDA OF THE LEFT EXPOSED)
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To: Oldpuppymax

And we want Zero and Unions running Banks and Chrysler?


16 posted on 05/12/2009 7:23:03 AM PDT by scooby321
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To: anniegetyourgun; RipSawyer
NO Economic Recovery, Multiple Raging Economic Storms

Economics / Recession 2008 - 2010
May 11, 2009 - 05:35 AM
By: Money_and_Markets

Martin Weiss writes: Any economist fixated on so-called “signs of a recovery” needs to have his head examined.

As I’ll prove to you in a moment, the hard-nosed reality is that five major economic cyclones are in progress at this very moment.

The storms are not abating. Nor are they changing direction. Quite the contrary, what you see today is, at best, merely a deceptive calm before the next, even larger tempests.

For investors who follow Wall Street, it could be fatal.

[snip]

17 posted on 05/12/2009 7:27:58 AM PDT by blam
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To: scooby321

Actually Government Motors could be a nice booby trap for Baraq if the GOP can ever get the message across that taxpayers are going to be subsidizing lush retirement payments and platinum benefits for UAW members.


18 posted on 05/12/2009 8:12:23 AM PDT by nascarnation
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To: muawiyah

I knew it all along, but I’m sure as hell not gonna let him forget he said it, LOL.


19 posted on 05/12/2009 8:14:12 AM PDT by nascarnation
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To: nascarnation

You understand I didn’t want you to continue through life being surprised by Andre. Most everybody else knows he’s telling lies because his mouth opens and closes.


20 posted on 05/12/2009 8:24:14 AM PDT by muawiyah
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To: nascarnation

You understand I didn’t want you to continue through life being surprised by Andre. Most everybody else knows he’s telling lies because his mouth opens and closes.


21 posted on 05/12/2009 8:24:26 AM PDT by muawiyah
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To: Libloather

Clearly impossible. Nancy, Barney, and Teddy have spent the last five years telling me the Social Security crisis was just an invention of the Bush administration.


22 posted on 05/12/2009 8:53:04 AM PDT by ArmstedFragg (hoaxy dopey changey)
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To: kabar

“SS will start going into the red in 2017.

I believe today’s report will show this has moved up to 2012 or so because during this recession, payroll tax revenues have been smaller than were projected last year at this time.

“The funny part is that the smaller SS surplus is actually making the national debt increase at a slower pace than would be the case if the revenues were not decreasing.”

Huh? On the contrary, so long as the government keeps spending the SS surplus every year (as it does), this masks the true size of the deficit. Thus, the faster the surplus is wiped out, the sooner this day of reckoning comes.

Because we’ve been stealing from the Trust Fund for 40+ years, we have to pay back what we borrowed. But because those “borrowed” (”stolen”, if you prefer) funds were NOT placed in assets we could sell, we will either have to borrow more (from the Chinese!) to cover the shortfall between expenditures and payroll taxes or we will have to use federal general funds. We’ve taken SO much from the Trust Fund that it will take until about 2040 to pay it all back. But at that point, the Trust Fund is officially broke and BY LAW, Congress at that point either has to drastically cut benefits (about 40% IIRC) or increase payroll taxes to restore fiscal balance. It ain’t a pretty picture. This is why adding trillions to our fiscal woes at this juncture rather than resolve this looming fiscal crisis is so flagrantly irresponsible. See http://www.iousathemovie.com/


23 posted on 05/12/2009 9:40:25 AM PDT by DrC
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To: DrC
Huh? On the contrary, so long as the government keeps spending the SS surplus every year (as it does), this masks the true size of the deficit. Thus, the faster the surplus is wiped out, the sooner this day of reckoning comes.

Here is how it works. After all the SS benefits are paid out to the 55 million or so who receive them, the "surplus" is deposited into the General Fund. In return, the Treausry deposits that same amount in the form of non-market T-bills into the SS Trust Fund. These T-bills accrue interest as well. The SS Trust fund is included in our now $12 trillion national debt under under "Intra-governmental holdings" as distinct from the publically held portion of the debt. Ironically, the smaller the surplus, the less money there is to put into the general fund, which thus slows down the amount of Intragovernmental holdings. Of course, the general fund must find this money from somewhere else, i.e., it must borrow more or spend less.

When payouts exceed revenue, as they did in the early 1980s, then these non-market T-bills need to be redeemed by the federal government so SS pay out the benefits. If the date is moved up to 2012 then that just speeds up this process. SS will then have to continue using its T-bills to fund benefits and by 2042 [or earlier], it will use up all of its T-bills and be able to pay about 75% of the benefits.

Because we’ve been stealing from the Trust Fund for 40+ years, we have to pay back what we borrowed. But because those “borrowed” (”stolen”, if you prefer) funds were NOT placed in assets we could sell, we will either have to borrow more (from the Chinese!) to cover the shortfall between expenditures and payroll taxes or we will have to use federal general funds. We’ve taken SO much from the Trust Fund that it will take until about 2040 to pay it all back. But at that point, the Trust Fund is officially broke and BY LAW, Congress at that point either has to drastically cut benefits (about 40% IIRC) or increase payroll taxes to restore fiscal balance. It ain’t a pretty picture. This is why adding trillions to our fiscal woes at this juncture rather than resolve this looming fiscal crisis is so flagrantly irresponsible.

True enough on what will happen by 2040 or so. I would not term it stealing since the SSTF was provided with interest bearing T-bills in return for the "surplus." The argument could be made that it is better for the General Fund to borrow money from ourselves (SS) than the Chinese. Of course, we could also cut spending. I spoke to a member of the SS Trust Fund Board (Tom Savings) who said it would be far better to eliminate the SSTF and just make SS a line item in the federal budget.

The real problem with SS is that it is structurally unsound. In 1950 there were 16 workers for every retiree, today it is 3.3 workers, and by 2030 it will be two. And SS is on automatic pilot with a formula being used to increase benefits each year [COLA] that bears no relation to revenue. They are not linked like Medicare B is.

SS is unsustainable. The status quo is not an option. We can reform it by using personal accounts or we can kick the can down the road like we did in 1983 by raising taxes and reducing benefits including raising the retirement age again. The 1983 fix was supposed to make SS solvent for the next 75 years. It took just 29 years if the new date is now 2012 when SS goes into the red.

SS is far easier to fix than Medicare/Medicaid. We are headed for a huge fiscal train wreck. The Train Wreck Ahead Medicare is rolling toward disaster, and there is no easy way to fix it.

24 posted on 05/12/2009 10:16:00 AM PDT by kabar
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To: domenad
"Either that, or he was including social security receipts in the general fund."


There is also the matter of the GOP Class of 1994 standing up to him for just long enough to get the government shut down and pass welfare reform. Does anyone want to guess what kind of fiscal shape we would have been in if Clinton and the Democratic majority were not thwarted during his first two years and a GOP legislative majority elected in 1994?
25 posted on 05/12/2009 10:42:53 AM PDT by rob777 (Personal Responsibility is the Price of Freedom)
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To: anniegetyourgun

According to those that follow Austrian economics theory this is a depression which are caused by the boom and bust of a huge credit expansion.


26 posted on 05/12/2009 11:07:28 AM PDT by misterrob (FUBO----Just say it, Foooooooooooooo Bohhhhhhhhh. Smooth)
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To: kabar

2017 - just in time for there to be nothing for any generations after the Boomers.


27 posted on 05/12/2009 5:29:02 PM PDT by GOP_1900AD (Stomping on "PC," destroying the Left, and smoking out faux "conservatives" - Take Back The GOP!)
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