Social Security Is Running Out of Money (In deficit for 2010, 9 yrs earlier than predicted)

Real Clear Markets ^ | 03/30/2010 | Investors Business Daily.

[SeekAndFind]

Social Security's chief actuary reports that the social safety net will run a deficit for 2010, nine years earlier than predicted. Put down that big gavel, Madam Speaker, we're about to hit the iceberg.

No sooner had House Speaker Nancy Pelosi, carrying the gavel used when Medicare was enacted, taken a victory lap around the Capitol Building after passage of the health care bill than did the chief actuary of the Social Security Administration report that his part of the social safety net had a big hole in it and would run a deficit for all of 2010.

Stephen C. Goss said that payments rose "unexpectedly" during the economic downturn as jobs disappeared and people feeling no hope and seeing little change opted to apply for benefits sooner than planned. Revenues also shrank due to fewer paychecks to tax.

Failure of the stimulus to keep unemployment under 8%, as the administration promised, has taken its toll on the entitlement. According to Goss, the administration expected a quicker, stronger recovery from the financial crisis. Officials foresaw an average unemployment rate of 8.2% in 2009 and 8.8% this year, though unemployment is hovering near 10%.

The 2010 shortfall is expected to be $29 billion, but it's still early. It could get bigger as the economy collapses under the weight of increased debt and deficits spurred on by the new taxes and economic disincentives of newly passed ObamaCare. Then, looming ahead, is the angel of economic death known as cap-and-trade.

[SeekAndFind]

As baby boomers have started retiring and the economy has collapsed, that day of reckoning is here, nine years earlier than expected. That's why we were so suspicious of projections that health care reform would produce surpluses two decades hence. Such estimates of costs are always wrong and always low.

[gathersnomoss]

Can you say Ten Trillion Dollars...? So this is just more of the same.

US meets wall.

[arealconservativeforachange]

That’s ok, they’ll cover it with your tax sheltered private retirement accounts after they confiscate them.

[freespirited]

All the members of Congress who spent our money from the Social Security trust fund and replaced it with IOUs should have to pay it back personally.

[ken21]

bob dope 1996

helped spend the social security surpluses

in an act of “bipartisanship” with democrat congresses.

[Yo-Yo]

Hey, no problem! All SS has to do is cash in that huge stack of Treasury Bonds it has amassed over the years that Congress exchanged for SS surpluses.

[DannyTN]

Misleading headline

Link to data

Balance as of 2007 $2 trillion +

Yes they are going to give out more in balances than they take in. But they aren't going to run out of funds any time soon.

[Atlas Sneezed]

Misleading post. There is no trust fund.

[Oceander]

Do much moling, perchance?

There is no trust fund. There is nothing more than a single treasury IOU - printed on real paper even - that cannot be negotiated or sold on the market and that therefore cannot be repaid except from out of the general tax revenues. Since the government is already running annual trillion, plus dollar deficits, that means that there will have to be additional tax increases (or additional borrowings - but that doesn't change the underlying insolvency issue of the entire government) to pay off this IOU.

Since the government cannot repay this phony IOU without raising taxes (or borrowing and creating even more debt elsewhere), it follows that it is not logically possible for there to be any sort of a "fund" - trusted or not - in any even half-assed sense to support future Social Security benefits payments.

In other words, there is no trust fund, and Social Security is now insolvent, period.

[DannyTN]

"Misleading post. There is no trust fund."

There is a trust fund. It is invested in U.S. Treasury Bills.

That the treasury doesn't have a room full of cash to pay off those bills doesn't matter. They will pay them off.

If you owned $1,000,000 in U.S. Treasury Bills, you would say you had a million dollars. You wouldn't say, I had a million dollars but it's worthless now, because they U.S. won't make good on those bills. They will and you know they will.

[SeekAndFind]

That the treasury doesn't have a room full of cash to pay off those bills doesn't matter. They will pay them off.

What makes you so confident that they WILL ?

Are you 100% certain that the USA will not go the way of Greece in the future ?

[GOPJ]

Drug addicts can collect social security because they’re “disabled”... just one of a million deadbeat groups that dems support bankrupting the system.

[Young Werther]

But, but, but...LBJ took the money to fight the View Nam War!

Now it is being used to fight the war on Seniors and Obama has raised this to new depths by taking our Medicare and giving it away!

Since this war seems unending I deem that we pay the congress critters $1 per year minus $.99 tax on stupidity which then have mucho stuffo!

[ColdSteelTalon]

I thought our government had raised taxes back in 1989 and that saved social security???

My God we are being lied to !!!

/sarcasm -off

[MarkeyD]

Drug addicts can collect social security because they’re “disabled”... just one of a million deadbeat groups that dems support bankrupting the system.

I know one. Nice house, nice car, and we are taking care of her.

[Hoodat]

The net effect is that Social Security now becomes a budget liability rather than an asset. Future outlays will now contribute to deficit spending, meaning that new Treasury bills will have to be sold to satisfy the demands of those being cashed in by the Social Security Administration. And currently, we aren't finding buyers for those new T-bills since the Social Security Administration is no longer buying.

Weimar Republic - Yes We Can!

[GOPJ]

Dems will fight for that drug addict to receive funds for 50 years - while turning to a American worker and telling them to stay on the job until they’re 70 years old. If dems could force conservatives to work until they drop dead at their desk, they would... and all so dem victim groups can vacation on the public dime their whole lives.

[mono]

Dont worry. There is no fund and no real money put aside. Its just an accounting scheme funded with ious.

[Uncle Miltie]

PONZI SCHEME ALERT!

[Uncle Miltie]

Stephen C. Goss said that payments rose "unexpectedly"

"Unexpectedly" Alert!