If a private financial institution
were as reckless with its fiduciary responsibility
as Congress has been with Social Security and Medicare,
there would be howls of indignation, demands for regulation,
and calls for the resignation and prosecution of those responsible.Arnold Kling
Social Security could be next to need a bailout
…A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.
Instead of helping to finance the rest of the government, as it has done for decades, our nation's biggest social program needs help from the Treasury to keep benefit checks from bouncing -- in other words, a taxpayer bailout.
No one has officially announced that Social Security will be cash-negative this year. But you can figure it out for yourself, as I did, by comparing two numbers in the recent federal budget update that the nonpartisan CBO issued last week.
The first number is $120 billion, the interest that Social Security will earn on its trust fund in fiscal 2010. The second is $92 billion, the overall Social Security surplus for fiscal 2010.
This means that without the interest income, Social Security will be $28 billion in the hole this fiscal year, which ends Sept. 30.
Why disregard the interest? Because as people like me have said repeatedly over the years, the interest, which consists of Treasury IOUs that the Social Security trust fund gets on its holdings of government securities, doesn't provide Social Security with any cash that it can use to pay its bills. The interest is merely an accounting entry with no economic significance.
…this year's Social Security cash shortfall is a watershed event. Until this year, Social Security was a problem for the future. Now it's a problem for the present.
Allan Sloan
Fortune magazine's senior editor at large
Washington Post
2/3/10
Was it justifiable for the baby boom and their elders to promise themselves tens of trillions of unfunded benefits like Social Security and Medicare for future generations to pay for?
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1 comment:
Of course it wasn't justified. It was Franklin Roosevelt's Ponzi Scheme to get votes during a time when people were desperate. It was carried on by my parents generation because after WWII they didn't want to have to take care of Mom and Dad the way families have taken care of each other forever. We Baby Boomers carried it on for the same reason. If some one else's money along with the few dollars we individually chipped in each pay day took care of Mom and Dad and kept them off my back then that was great. Now when it is our turn to get in on the gravy train DON'T YOU DARE MESS WITH MY SOCIAL SECURITY!
But then I have been blogging about this welfare for the elderly hand out for years and before that writing letters to congress. Never made a bit of difference. Maybe now it will. When it comes to food in their childrens mouths and geezers going to Arizona in their fancy RV's the young are going to revolt and demand changes. BB
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