Thursday, February 12, 2015

Why Social Security Is Bankrupting The US Economy

Why Social Security Is Bankrupting The US Economy

Image source: TheMartinLawOffice
Image source: TheMartinLawOffice
Social Security is fast running out of money, weighing down on the economy, and may have to start cutting benefits to some Americans as early as 2016.
That’s the determination of the Social Security and Medicare Boards of Trustees in their annual report.
“Neither Medicare nor Social Security can sustain projected long-run program costs in full under currently scheduled financing, and legislative changes are necessary to avoid disruptive consequences for beneficiaries and taxpayers,” the introduction to the report states.
Each day 10,000 baby boomers reach retirement age and qualify for Social Security. There are 76 million baby boomers – all of whom are or will depend on money that may not be there.
The disruption of Social Security benefits could damage the entire economy, the trustees believe.
Additionally, the Social Security Disability Insurance trust fund, which provides income for disabled people who cannot work, could run out of money in less than two years. If Congress does not act by late 2016, disability payments could be cut by 20 percent.
For Those Who Desperately Want Out Of The Rat-Race But Need A Steady Stream Of Income
Also, tax revenue through 2033 will only be able to cover about 75 percent of the Old Age and Survivors Trust Fund, which provides incomes for senior citizens. That means the Social Security Administration would be forced to cut benefits by one-fourth to stay in operation.
Effect on the Economy could be Catastrophic
The effect of the depletion of the Social Security trust funds on the economy could be catastrophic, and the devastation could extend far beyond those who receive benefits. A 2013 report from the American Association of Retired People (AARP) Public Policy Institute showed that the US economy is heavily dependent on Social Security.
The Institute reported:
  • 57 million people, or one out of six Americans, received Social Security benefits in 2012.
  • Social Security is the only source of income for 22 million Americans.
  • Nine out of 10 people over 65 depend on Social Security benefits.
  • AARP estimates that the $774.6 billion in Social Security benefits supports nine million jobs in the United States that generate $370 billion in wages. In other words, millions of Americans could be thrown out of work if there was a significant cut in Social Security benefits.
  • Social Security payments are responsible for $1.4 trillion in economic output.
If AARP’s figures are correct, large scale cuts to Social Security could hit the economy much like the economic meltdown of 2008 – or worse. Billions of dollars in revenue and millions of jobs could disappear overnight.
“According to our analysis, reducing benefits by 25 percent across the board (about $190 billion), which the Social Security actuaries project will occur around the year 2033, could cost the U.S. economy about 2.3 million jobs, $349 billion in economic output, about $194 billion in GDP, and about $93 billion in employee compensation in 2012 terms,” the AARP estimate noted.
Depletion of Social Security could begin in 2019
The Social Security Administration will start raiding the Old Age and Survivors Insurance trust fund in order to keep benefits flowing to senior citizens in 2019, the Trustees’ report noted. This accounting trick will cover benefits until 2033, when the trust fund will be completely exhausted.
“After 2019, Treasury will redeem trust fund asset reserves to the extent that program cost exceeds tax revenue and interest earnings until depletion of combined trust fund reserves in 2033, the same year projected in last year’s Trustees Report,” the report stated.
It looks like baby boomers and others might be forced to pay for their own retirement whether they want to or not – and that Social Security’s downfall could result in the demise of the American economy, too.

8 comments:

Seeker said...

Social Security is not bankrupting the US economy, the war machine is, oh and then there is the derivatives of the banking cartel!

Anonymous said...

Excuse me but -- if the Bushes had kept their paws OUT of the social security fund - WE WOULD HAVE NO PROBLEMS. Bush Sr. stated at one time that if the Americans knew how much they took out of the social security fund that the Americans would lynch them!!!! He was asked by the reporter if he planned to put any of it back..........no way, way too much was taken out. DUH!!!

Anonymous said...

AND, if you really want to get into it - we pay in much more than we get paid back. And oh yeah, what is this garbage that if you make over $25,000 a year you need to file taxes. Why would you pay taxes twice?????? Good old government. And the government earns 18%!!!!!!!! on investments on our social security. Why don't the American people SEE THIS!

Anonymous said...

one.. there is no ss trust fund ,nor has there ever been one!! two, the UN / IMF writs the ss checks, I can only guess what cabalist fiat printer creates that paper out of thin air!! Iam scrued!

Anonymous said...

Social Security is monies that people pay out of THEIR OWN PAY CHECK! therefore it IS NOT bankrupting anything, in fact thats just one of the most ignorant if not most stupid shenanigans being played in politics by RIGHT WINGERS. Let me say Democrats and Republicans are just a branch of Religious Oppression same as Military. They all 3 DIVIDE AND CONQUER! See because sites like this play their game for them they just have to push out a little from the top and sites like this will run with it. Out of all the nonsense you post here this is one THE MOST RIDICULOUS things that you should know better than posting. The U.S. Government Corporation is whats bankrupting America, they have taken from the postal service, they have stolen retires HARD EARNED money and you will bitch about Welfare...You know your like a dog chasing its tail, you post 10 ridiculous things, and 1 good thing, and you think your awake? why don't you WAKE UP and quit playing the Governments games..lest you are just another arm for the governments antics.

Anonymous said...

Tomorrow there will be a post on how social security is needed for the old people.

We'll see posts back and forth forever and ever.

People know it is abused, but people don't want to see it reduced (how do you cut people off from abuse unless you control how much they can steal in their abuse?)

too many people complaining but every solution they'll throw the words new world order on it and reject it.

Bah.

Anonymous said...

US citizens pay taxes.
People don't take the time to read the code to find out what that means.
They want in, they pay the membership dues.
They should stop complaining.
At least some people wanted to know why they were paying, did the research, found out why, and made some changes in their status and their life and aren't complaining anymore.

Anonymous said...

Tell the courts that.
They have tapped the fund of the poor and homeless so much, they probably emptied it, so now they reach the average joe for nonsense to get that number - yes it is part of the judicial process if you give it to them.

Also the kids coming here with no parents....get them a ss number and put them in the system, spend the money out of ssa on them.

The code tells you how much is created when the number is issued.

you can say there is no fund if you want, that doesn't mean you speak the US code, you are speaking your own code, and that code of yours is opinion and not fact.

folks coming over on H1B visas are applying for soc sec numbers and the corporations pay them out of that fund.

that fund generates money as easy as the fed does...once the account is created they can create money for it.

Thus the need for fresh bodies to get fresh numbers to open fresh accounts to be tapped.

If some were awake, they'd see that, but no, they saw the grammys and the super bowl.