Skip to comments.Why Social Security Will Go Bankrupt Sooner Than People Think
Posted on 08/14/2009 3:00:26 AM PDT by Scanian
On May 12, 2009, the trustees for the Social Security system released their annual report,
"The 2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds."
Following release of this report, many media outlets were quick to report (or should I say regurgitate) the findings sited in the trustee's executive summary -- notably that Social Security payroll tax collections would begin to exceed benefits paid in 2016, a year shorter than had been forecasted in 2008.
Although the news media were correct to convey this fact, such simplistic accounts failed to candidly state the true deterioration of the Social Security system over the past year.
For example, in their 2008 report, the Social Security trustees projected a cash surplus of $87 billion in 2009 -- a figure reduced to $19 billion this year. However, even this sharp 78% reduction in the projected Social Security cash surplus failed to illuminate the nonsensical statistical assumptions used by the trustees in the prognostications -- assumptions so unfathomable they make the 2009 trustee report virtually useless.
Employment and Wages
Social Security tax collections are dependant upon two factors: the level of employment and the level of wages. If more people are working, then naturally payroll tax collections from employees and employers are higher. Moreover, as wages increase, at least up to the OASDI cap level ($106,800 for 2009), then payroll tax collections too will increase.
However, both employment and the level of wages have declined rapidly in the United States this year. This is best signified by the current 9.4% unemployment rate (up from 7.6% in January), a headline rate that will certainly exceed 10% in the near future.
Moreover, average hourly earnings increased to just $18.56 in July
(Excerpt) Read more at americanthinker.com ...
wont matter anyway ....dollars are fast becommig worthless...gove must stop spending...
Our pols have been skimming the SS “trust fund” for decades. Income tax receipts will soon be funding monthly checks. The young family just starting out will be subsidizing senior citizen vacations even more.
Your telling me that a person who has HAD to put money into the system involuntarily for the last 50+ years should not be able to get it back ?
I hope they’re safe . That is my firearm and ammo $$$.
Last Pres . Bush check paid for two fine Rugers .
What’s a few billion when we are borrowing trillions. Just ask Red China for more money.
It’s the Obama way.
>The young family just starting out will be subsidizing senior citizen vacations even more.
dude, that is plain ignorant.
Those seniors have been paying into SS their entire lives - they are not some unwashed illegals sliding across the border.
what about the lockbox?
I would gladly take a lump sum payment of all the money I’ve had confiscated (and still being confiscated)just to be rid of dependence on the government.
I would take half and still be happy.
I'm not relying on SS to fund my retirement.
Never have, never will.
Unless payroll taxes are increased the extra money needed will come from income taxes. It is a mathematical certainty and has nothing to do with what seniors paid into the system.
bill1952 said: "dude, that is plain ignorant. Those seniors have been paying into SS their entire lives"
Without getting into who is ignorant, I think it important to point out that there is nothing contradictory about these two statements. Seniors have been paying into the system their entire lives. And young families will be subsidizing senior citizens.
What you, bill1952, seem to be ignoring is that the seniors permitted all of their payments to be SPENT, and not saved, by making payments to a prior generation. They permitted this despite warnings from intelligent people along the way that such a ponzi scheme was unsustainable.
The real question is going to be, at what point will the younger generation, who will NEVER see any benefit from Social Security, demand that the program be abandoned?
There really are no surprises in all this. The outcome has been predictable all the way up to the point where the system breaks down and the payments to beneficiaries must be sharply reduced if not eliminated.
The only unknown is what people are going to do about it? Will they wise up and stop implementing hare-brained socialist schemes? Or will they simply find some other way to steal one person's money to give it to another?
At the risk of starting a bidding war, I would settle for 45%, paid in gold.
Oh horseshit. We were outvoted by the same liberal trash in the same way that conservatives of all stripes are being outvoted right now, and with the same lasting damage, ie, these programs cannot be outdone.
you neatly sidestepped my entire point and shifted the blame to a straw man.
A cute dialog, but you sound like Nancy Pelosi, with the same propensity to ignore the facts stated and rail against a chimera created by you to avoid the issue stated.
If your point is that being outvoted somehow entitles you to take money from future generations, then I disagree completely. Nobody is entitled to Social Security payments. Such payments are simply theft by the government.
Democratically passed legislation to commit theft is still theft.
I feel the same way. Hubby has been working and paying in for over 30 years with the promise that we would get it back someday. They had better figure out a way to make that happen soon. Whether it takes cuts now to what they are paying out so those us us who are older later on get what we have been promised.
Treasury will print One thousand bazillion trillion quadrillion dollars each year.
You will need a dump truck full of cash to buy your can of cat food. Enjoy.
On the down side, every tree in the US will be cut down to print money. On the upside, every Senior citizen and illegal immigrant will be a multi millionaire and we pay off the Chinese with a Bazillion dollar bill. It will have Obamas picture on it. Do you think they will nuke us for this?
Don’t like cats , BUT use cans of cat food for CATFISH chum .
US currency is printed on paper made from linen and cotton.
“The young family just starting out will be subsidizing senior citizen vacations even more.”
Don’t think I don’t appreciate it cause I do. I have drawn my first two and next wednesday will be my third social security check. I want to thank you because they sure come in handy when I make the payments on my new Dodge SLT Ram Pickup with 5.7 Hemi engine and my new SunCruiser 24 foot Party Barge Pontoon boat. Without your contributions I would never be able to afford either of them.
I paid into the “ponzi scheme” for 49 years and I think I’m entitled to a few nice things in my life as it starts to wind down.
As for vacations I can’t decide on Jamaica or the Cayman Islands. What do you think? Since your paying for it I think you should have some input as to where I spend it.
The only sane thing to do would be to pay down current debt, which of course they (congress) never did. No, they just couldn't help themselves, so they kept on skimming the cash and spending it on ever expanding social programs with the end of buying more votes.
PS My contributions for FICA go back to 1961 and if invested in the stock market w/ returns tracking the Dow would be worth $1,200,000 or there abouts. The actual total cash withheld is around $50,000. So no, I don't want just what they skimmed, I want the time value of that money spread over 40+ years that they screwed me out of, they can keep the chump change.
PPS Is anyone else getting screwy results from the "spell check" feature? Like it flags every word?