News From The Social Security Ponzi Scheme: There isn’t enough cash coming in to pay retirees

Forbes ^ | 07/14/2017 | William Baldwin

[SeekAndFind]

The government is out today with its annual update of Social Security’s sick finances:

--The system is $12.5 trillion under water, up from $11.4 trillion a year ago.

--Absent law changes, checks to retirees will have to be chopped 23% beginning in 2035.

--To fix just the retirement pay program, Congress could kick up the payroll tax by 2.8 percentage points. Fixing Medicare’s disastrous finances would be in addition.

--The retirement operation is running an $86 billion annual deficit. That’s the difference between the money coming in from Social Security’s share of payroll taxes (12.4% of covered payroll) and the money going out in monthly checks and in overhead.

Ponzi? That’s too kind an interpretation. A Ponzi scheme has old investors being paid off with money raised from new ones. In this case there isn’t enough cash coming in from new players to pay off the old ones. The $86 billion shortfall is being covered in traditional federal fashion, by drawing on general tax revenues and by printing money.

The trustees of the Social Security system put the grim news in as positive light as they can. They cheerily note that “asset reserves” grew from $2,813 billion at the end of 2015 to $2,848 billion at the end of 2016.

But these “reserves” are not a pile of saved capital in the form of stocks, bonds and mortgages. Rather, they are a bookkeeping entry in which the government borrows money from the government, and the government pretends to have “income” by collecting interest from…the government.

[Terry L Smith]

dear wind,

re: “We HAD enough money until Johnson started paying every whore who kept their illegitimate kid.

“Johnson” is another slang term for what LBJ was.”

That does not compute, since “LBJ”’s name is Lyndon Baines Johnson.

[windsorknot]

That does not compute, since “LBJ”’s name is Lyndon Baines Johnson.

Lyndon Baines Johnson, and a "johnson" is what he was.

[jonose]

Not if some foreign entity soaks up the printed dollars.

[LibsRJerks]

It’s the “disability” crowd that gets me. As a healthcare provider, I sign off on this crap all the time. Disability paid out the other day because “I can’t sit or stand for long periods of time.”

So, what do you do? Lay down all the time?

If you can walk to my office, and TALK to me about your disability issues, you can work. Get some kind of call center job. You can do that lying down, for God’s sake. Sit there and lick envelopes ....do SOMETHING. These folks have PLENTY of time to buy cigs, booze, and play the slots. Stores are CROWDED at all times nowadays ...during regular business hours. People are out doing as they please while the rest of us suckers support it all. Not to mention, the habits they cultivate are another thing we’re on the hook for — curing their ill health brought on by a life of sloth and overindulgence. I see it every GD day.

This country needs a RESET.