Over at Investors Business Daily, Jed Graham writes that "The outlook for Social Security's trust fund has deteriorated to an astonishing degree over the past year, new Congressional Budget Office projections show.”
“The nonpartisan budget scorekeeper now expects the trust fund to peak in 2018 and decline to $2.7 trillion in 2022 — a full $1 trillion less than Social Security's own actuaries were expecting last year.”
“The new trajectory suggests that the trust fund's current depletion date of 2036 may jump ahead several years when Social Security's trustees release their annual report this spring, making the retirement program more central to the 2012 election.”
Posts
2 comments:
You may recall that two years ago I said there would be a shortfall from what was projected and the folks at Angry Bear called me a "Chicken Little".
Turns out I was right.
I think things are worse than CBO sees. I see the TF topping out in the 3rd quarter of calendar 2016. The Fund will top out at 2.722T.
That would put it 6 years ahead of "schedule" and over $1T light of what the SSTF said a year ago.
It will be interesting to see what SSA reports to Congress. I don't think they can ignore the CBO (and the Fed's) economic forecasts.
This significant change in the outlook for SS should make it an election year issue. But that won't happen. No one one wants to touch this third rail.
So it will wait for a year or two more, and by then it will be too late to right the ship.
bk
No politician wants to touch the third rail, but there are 118 million potential voters under age 46 who would love to have a candidate to vote for who says they want to tear the third rail out, smelt it down and make something new.
In 1984 my computer model showed SS-OASI would be unable to pay full scheduled benefits past 2036 while the Trustees calculated it would last till 2064. What they did not take into account and as far as I can tell still do not is the effect of wage growth on each cohorts SS-OASI benefits.
Today using a 5% US Treasury rate, it would still come up with 2036. My model was a best case scenario. With unemployment at greater than 12% (people have stopped looking for work) SSA revenues have dropped. In fact I did a quick calculation of my potential SS-OASI benefit. My potential benefit at 56 will be no different if I were to stop working now or work till age 66 year 4 months. I did this calculation for a number of people my age and a bit older. They were also amazed that they have basically reached their highest SS-OASI benefit long before full retirement.
But the worse thing about SS-OASI is that anyone born after 1985 can expect at most 29 cents in benefits for each $1 in taxes and credited US Treasury rate interest. Due to the near zero population growth for the past 30 years we have reached a near equilibrium where the work force to beneficiaries will be close to 2.2 to 1. It does not take a math wiz to figure out that a 10.6% payroll tax with 3.9 workers to 1 beneficiary will have to increase over 80% to account for this long forseen result of zero population growth.
In simple terms, our grandparents based the system on us having kids; a form of indentured servitude to pay for the program they voted for.
When a person says “We Earned it!” what exactly do they mean?
To me, this phrase is a righteous euphemism for making the more truthful statement: "We were snookered by this Social Security Ponzi scheme, and now we are going to snooker the next generation!"
If Social Security benefits have been "earned" who is obligated to pay benefits to those who "earned" them? Workers? On a regressive tax basis? Why? Why perpetuate a fraud upon the innocent? Who is responsible for bearing the burden of a fraud? The person defrauded? Or an innocent or unborn child?
I and my family support repealing the Social Security Act. Those under age 46 outnumber the 44 million beneficiaries and 58 million boomers. They just need to make their voices heard.
http://www.justayno.50megs.com/ss.html
Post a Comment