Social Security Will Be Paying Out More Than It Receives In Just Five Years

[DamianTV]

http://www.zerohedge.com/news/2017-0...ust-five-years

When social security was first implemented in the 1930’s, America was a very different country. Especially in regards to demographics. The average life expectancy was roughly 18 years younger than it is now, and birth rates were a bit higher than they are now. By the 1950’s, the fertility rate was twice as high as it is in the 21st century.

In other words, for the first few decades, social security seemed very sustainable. Most people would only live long enough to benefit from it for a few years, and there was an abundance of young workers who could pay into the system.

Those days are long gone. As birth rates plummet and people live longer, (which otherwise should be considered a positive development) social security’s future is looking more and more bleak.

No matter how you slice it, it doesn’t seem possible to keep social security funded. In fact, social security is going to start paying out more money than it receives in just a few short years. It may even be insolvent before the baby boomer generation dies off.

According to the Social Security Board of Trustees, the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be depleted in 2034.

When this happens, only 77 percent of benefits will be payable. That estimate is no change from last year’s estimate.

In addition, the Disability Insurance trust fund will be depleted in 2028, which is an improvement from last year’s estimate of 2023. Once that fund is depleted, 93 percent of benefits will be paid.

Right now, Social Security continues to take in through revenue more than it pays it through benefits, which is expected to continue until 2022. Once Social Security begins to pay out more than it takes in, it will be forced to liquidate the assets held by the trust funds.

In 2016, Social Security generated $957 billion in income. It only paid out $922 billion including $911 billion in benefits to 61 million beneficiaries.

But the solutions that have been proposed for this problem don’t hold much promise. For instance, we know that simply raising taxes won’t work.

But increasing the payroll tax is not a good long-term solution to fixing Social Security. For example a higher payroll tax would have negative economic effects. In addition, it’s not even clear that raising the payroll tax would even generate enough revenue.

“Some claim that the solution to preserving Social Security is to raise more taxes, but history shows that doesn’t work,” said David Barnes who is the director of policy engagement for Generation Opportunity in a statement to the Washington Free Beacon. “In fact, since Social Security was created, payroll taxes have been raised more than 20 times. Twenty times! Yet, the program is still headed towards insolvency.”

This is one reason why so many Western countries, almost all of which are suffering from declining birth rates, have been so eager to open their borders to more immigrants. They’re trying to bring in as many young workers as they can.

But that’s not going to work either. Forget about the high crime rates, terrorist attacks, and social disintegration that Europe is facing now after bringing in millions of immigrants. Even if those problems didn’t exist, immigration isn’t the solution. The West has had wide open borders for decades, and it hasn’t made a dent in the liabilities faced by social security programs (perhaps these immigrants aren’t paying as many taxes as these governments had hoped).

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Full article on link.

Where's Zippy?

Where is the next Bernie Madoff to get his idea to rip people off from Social(ist) (In)Security?

Is this what happens when your country has a Stable Money System?

[RJB]

What, me worry?

[heavenlyboy34]

Congress also borrowed against SS to bribe their constituents for something like 20 years, right? Genius.

[donnay]

All Ponzi schemes must come to an end.

[timosman]

All Ponzi schemes must come to an end.

Problem is most lawmakers think it won't happen in their lifetime.

[Ender]

Problem is most lawmakers think it won't happen in their lifetime.

Tis true, tis sad; tis sad tis true.

[oyarde]

With 40 percent of the country not employed . That will be problematic .

[tod evans]

With 40 percent of the country not employed . That will be problematic .

Government 'employment' must be discounted too...........

[Schifference]

They should just raise taxes on the wealthy to fix this. The rich need to pay their fair share!

[ILUVRP]

does this count the 2.8 trillion $$$ they have in U.S. government bonds .

[angelatc]

As birth rates plummet and people live longer, (which otherwise should be considered a positive development) social security’s future is looking more and more bleak.

This is why we need national health care. To kill off the old.

[ILUVRP]

This is why we need national health care. To kill off the old.

some people get their facts wrong , just check the 1st 2 graphs on the link below .
https://www.google.com/url?sa=t&rct=...upsUGssbERkkrg

[Zippyjuan]

https://www.ssa.gov/policy/docs/ssb/v75n1/v75n1p1.html

In 1980, the OASDI trust fund reserves were low and declining. Congress enacted changes in 1983 (discussed later) that enabled reserves to begin to accumulate. In the 2014 edition of the Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds (henceforth, the Trustees Report), reserves are projected to peak around 2020 and to be depleted around 2033 if no changes are made to the tax or benefit provisions before then.6 (Once the reserves are depleted, an estimated 77 percent of scheduled benefits would continue to be payable from tax receipts alone.) Chart 1 shows the annual cash flows underlying this rise and fall relative to gross domestic product (GDP). Chart 2 shows the reserve levels under six alternative measures. The overall patterns, if not the exact depletion date, have changed little over the years: For example, charts showing similar projections that appear in Hambor (1987) closely resemble Chart 2, panels A and D.

Chart 1 shows trust fund total income exceeding trust fund expenditures from 1984 through 2019, generating annual surpluses. Beginning in 2020, total income is projected to be less than expenditures, generating annual deficits (shown as negative surpluses). The point at which the surplus changes to a deficit in 2019–2020 corresponds with the nominal-dollar peak in reserves shown in Chart 2, panel A.7 An annual deficit means only that the trust funds are redeeming their assets: There is no borrowing and there is no debt.
Chart 1 shows that expenditures generally fell relative to GDP during 1980–2000. Since 2000, expenditures have been rising relative to GDP, and they are projected to continue rising until the reserves are depleted in 2033. Thereafter, the expenditures shown in Chart 1 reflect “payable benefits,” which are limited to projected tax income. Actual income and expenditures (before and after depletion) will differ from the projections shown here, as Congress changes tax or benefit provisions to maintain solvency.

More illegal immigrants needed?

https://news.vice.com/article/unauth...er-last-decade

Unauthorized Immigrants Paid $100 Billion Into Social Security Over Last Decade

Unauthorized workers are paying an estimated $13 billion a year in social security taxes and only getting around $1 billion back, according to a senior government statistician.

Stephen Goss, the chief actuary of the Social Security Administration (SSA), told VICE News that an estimated 7 million people are currently working in the US illegally. Of those, he estimates that about 3.1 million are using fake or expired social security numbers, yet also paying automatic payroll taxes. Goss believes that these workers pay an annual net contribution of $12 billion to the Social Security Trust Fund.

The SSA estimates that unauthorized workers have paid a whopping $100 billion into the fund over the past decade. Yet as these people are in the US illegally, it is unlikely that they will be able to benefit from their contributions later in life.

[juleswin]

All Ponzi schemes must come to an end.

This is another area where govt can do it better than private enterprise. They run a hell of a ponzi scheme

[Madison320]

According to the Social Security Board of Trustees, the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be depleted in 2034.

I think these "warning" articles are actually designed to make the situation seem much better than it actually is. There's nothing in those "trust funds". The money has been spent. They put treasuries in those funds which is like writing a check to yourself.

We're broke now not 2034.