Social Security crunch coming fast

MSN Money ^ | 17 August 2009 | Bill Fleckstein

[Lorianne]

The debate over health care has captured everyone's attention, but it appears the next big government program that needs to be addressed will be Social Security. That's the focus of the July 30 article "The next great bailout: Social Security" by Allan Sloan, Fortune's senior editor at large.

Those who've been paying attention have long known there is no money in the Social Security Trust Fund -- it's all been spent. Thus, former Vice President Al Gore's famous assessment that Social Security receipts should be placed in a "lockbox" was actually correct.

Given that so few people really understand the Ponzi nature of the current Social Security financing scheme -- created in 1983 by a commission chaired by none other than the world's greatest serial blower of bubbles, Alan Greenspan -- I decided to reprise Sloan's article. (The Social Security problem is especially important because it likely will put additional pressure on the dollar and on bonds, and exacerbate the funding crisis down the road.)

The story begins: "In Washington these days, the only topics of discussion seem to be how many trillions to throw at health care and the recession, and whom on Wall Street to pillory next. But watch out. Lurking just below the surface is a bailout candidate that may soon emerge like the great white shark in 'Jaws': Social Security.

"Perhaps as early as this year, Social Security, at $680 billion the nation's biggest social program, will be transformed from an operation that's helped finance the rest of the government for 25 years into a cash drain that will need money from the Treasury. In other words, a bailout."

[freekitty]

That’s why the baby boomers have to go. Let’s jail our Congress. No pensions and make them pay back every dime they stole.

[Gritty]

I don't see the problem. Al Gore assured us SS was safely resting in a “secure lock-box”, just awaiting our Golden Years! /s/

[Nam Vet]

That was pretty well known and accepted, really. I mean understood by those of us who were politically involved at an early age. Politics always interested me and I was born a Conservative. My parents also hosted fundraisers for Ronaldus Maximus with he and Nancy in attendance. (first run for the governorship) Ah, the good old days. Yes, all you youngsters out there, California once was a Conservative state.

Nam Vet

[parsifal]

Really good article linked within the MSN article:

Social Security: The Next Great Bailout

http://money.cnn.com/2009/07/29/news/economy/fixing_social_security.fortune/index.htm

parsy, who is not surprised

[Myrddin]

That’s why the baby boomers have to go. Let’s jail our Congress. No pensions and make them pay back every dime they stole.

The baby boomers have shouldered the majority of the payments into social security over their lives. They have received almost nothing for all those contributions. What do you mean by "the baby boomers have to go"? Would you deny them collection of benefits after a lifetime of contributions? Are they not entitled to collect what they have paid into their "account"? It's not their fault that the corrupt politicians stole the money.

[freekitty]

I think you misunderstood my comment. I know the baby boomers well since I am one.

We are the largest group ever to take SS.

[RockyMtnMan]

Just give it all back to me in the form of a tax deduction and we’ll call it even, no need to pay me later.

[New Jersey Realist]

Lets get Social Security straightened out FIRST, then Medicare before we tackle anything like healthcare. I swear the answer is to kill all the lawyers as Shakespeare expoused and execute all the cheaters.

[no-s]

Just give it all back to me in the form of a tax deduction and we’ll call it even

There ya go! an actual stimulus plan.

[nascarnation]

Mr. Bernie Madoff
paging Mr. Bernie Madoff
please pick up the white courtesy telephone

President Baraq Obama is asking you to become Social Sec Czar.

fun to see this
how many others like me are going from 40 yrs of paying the maximum SS tax to paying zippo and collecting benefits?
and I guarantee there’s nobody at my company that they hired to replace me to replace my tax paid.

and boys and girls.....despite what AARP tells you....the “trust fund” really doesn’t contain hundreds of billions

[Dinsdale]

Are they not entitled to collect what they have paid into their "account"? It's not their fault that the corrupt politicians stole the money.

'You !#%^@$ed up, you trusted them.'

It's not the Madoff suckers fault the money was stolen ether. In any case it's gone.

[Lurkina.n.Learnin]

Unfunded liabilities

Medicare/msdicaid $39.6 Trillion

Social sec $10.7 Trillion

Prescription drugs $8.6 Tillion

We’re so screwed

http://www.usdebtclock.org/

[RetiredArmy]

I guess this means I am not going to get my socialized security check from the imperial socialist commies in Moscow, DC in a couple of years.

[conservatism_IS_compassion]

former Vice President Al Gore's famous assessment that Social Security receipts should be placed in a "lockbox" was actually correct.

How would this even be done? Have the Mint print up some $1,000,000 bills and sell them to the Social Security administration, which would then lock them up in Ft. Knox?

That "lockbox" concept is precisely what got Social Security in the trouble in the first place. Because there is no difference between printing billion-dollar bills and printing billion-dollar government IOUs. Dollars are US government debt.

The problem is not that the government can't print billion dollar bills any time it so chooses. The problem is that those bills are government debt. That isn't a problem as long as the government just prints the dollars and locks them up in Ft. Knox, and that is precisely what all those T-bills in the Social Security Trust Fund amount to. But that is no different than if you or I wrote an IOU for a trillion dollars, and kept it in a safe somewhere - it is a moot exercise. If the government actually puts those notes on the market, the bluff will be called. And increasing government debt weakens the government's credit rating - and the government's credit rating is the only thing that sustains the value of the dollar and prevents hyperinflation.

All of which is the long way of saying that the "Social Security Trust Fund" is nothing more than a claim on the Treasury, and when the cash flow of Social Security turns negative the Treasury will perforce have to print, and put into circulation, the dollars to cover the shortfall. And when the dollar supply increases as fast as that process implies, the value of the dollar will sink like a stone. At that point, Democrats will be talking about "wage and price controls" in an attempt to censor that information. Shortages and precipitous drops in quality will immediately ensue.

And it will be cold comfort when we conservatives say, "I told you so."

[Myrddin]

I never trusted them. I've simply avoided imprisonment by paying what was demanded. Politicians are liars and thieves. To feign surprise when they do you harm is like being surprised when a venomous snake bites you. It's in their nature.

[gogogodzilla]

Solution:

End prescription drug benefit.

Mandate anyone using Medicare/Medicaid to follow a fitness program. Failure to comply ends enrollment in it... ie: get yer own d@mn insurance now! (and allow hospitals to refuse treatment to anyone without either insurance or a means to pay)

Increase *LEGAL* immigration rates for skilled labor, ie: those with college/professional degrees. The more of them around, the more people with better paying jobs to tax.

Lastly, charge illegals for all government services used and then deport them. If they fail to pay, seize their funds.

[Lorianne]

I think it exceeds the Gross Galactical Product of the next 10 years.

[Lurkina.n.Learnin]

“End prescription drug benefit”

I’m good with that.

“Mandate anyone using Medicare/Medicaid to follow a fitness program. Failure to comply ends enrollment in it... ie: get yer own d@mn insurance now! (and allow hospitals to refuse treatment to anyone without either insurance or a means to pay)”

If they want to reimburse me plus interest for everything I and my employers paid in in my name then I’m fine with cancellation.

Mandatory fitness regimes is another thing entirely. The gov’t doesn’t have the right to mandate how I spend my retirement. They are headed down a road of determining every aspect of our lives because of “the cost it imposes on society”. Red meat,gone...snack foods, gone...alcohol, gone.....You name it and they will decide.

The no treatment in hospital is fine if it is across the board but don’t make me insure someone else and then deny me.

[gogogodzilla]

Mandatory fitness regimes is another thing entirely. The gov’t doesn’t have the right to mandate how I spend my retirement.

This is just like an insurance company mandating the use of certain doctors or medical centers. If you don't follow their 'suggestions', they don't pay out.

And it's be the same here. You wouldn't be forced to do the PT, but it you didn't... you'd be dropped from Medicare/Medicaid. And with hospitals no longer required to provide service to those without insurance or a means to pay, well...

[Lurkina.n.Learnin]

““Mandate anyone using Medicare/Medicaid to follow a fitness program. Failure to comply ends enrollment in it... ie: get yer own d@mn insurance now! (and allow hospitals to refuse treatment to anyone without either insurance or a means to pay)”

Please keep in mind that they not me Mandated my particapation in this. So it is my own “d@mn insurance”.