Yes, you read that right. The U.S. taxpayer could be on the hook yet again for another bailout in the next year or so – this time for Social Security! This according to an article by Allan Sloan (Fortune magazine’s senior editor at large).
It’s long been common knowledge that the Social Security system is deeply mismanaged, and headed for bankruptcy some time in the future, but it looks like the future may be now. A report from the Congressional Budget Office (CBO) shows that Social Security is taking in less in taxes than it is spending on benefits for the first time in 25 years.
According to Sloan’s analysis of the CBO report, the Social Security program will be $28 billion in the hole this fiscal year, which ends Sept. 30.
The current revision of the date at which the SS program begins it’s transition from surplus to perpetual deficit is the result of the recent recession, but it’s the spending in Washington D.C. that further compound the issue.
When the fund ran into the red 25 years ago, the last time the country experienced a recession of this magnitude, the problem was “fixed” by a combination of benefit cuts and tax hikes. That essentially led to a short term surplus that has now run dry.
As with some much in Washington these days, the problem is a lack of leadership. Instead of fixing the problem when they had the chance, our elected officials saw fit to use that Social Security surplus to fund other – unrelated – government spending. And now the surplus has run dry, leaving us with an under funded retirement program, and other programs un-funded since they were paid for by the surplus!
With trillion dollar deficits for the foreseeable future, a record number of Americans without jobs and a greater number of Americans forced into early retirement and newly dependent on the Social Security program, it’s hard to imagine where the money is going to come from; and quite frankly I shudder to think of the possibilities.
Time will tell if our current crop of leaders have what it takes to actually fix the problem, but given the recent spate of bailouts, reckless spending, and hikes to the debt ceiling by congress, the prospect looks dim indeed.
The situation with social security is really becoming a mess. I mean, the government can’t let the SS program fail because of all the people who depend on it and who have paid into it. But at the same time, it has to fail eventually, right? It’s kind of like a huge Ponzi scheme, in which the newer members pay for the older ones.
THANK GOD George Bush’s insane idea to put the social security fund’s in the stock market never saw the light of day!
We’d have been completely wiped out in the 2008 stock market crash. At least as things are, we still have enough funds to pay for current retirees..
Robert,
Bush’s plan would only have put a portion of the SS funds into the stock market – the portion meant for people who will retire in 15 years or more. New retirees and those soon to retire would not be affected.
Besides, since the crash of 2008-2009 the market has bounced back quite a lot. If those funds were continuously invested during the low point then the return would be greater.
“the prospect looks dim indeed”
Things do look dim but this mess is all fixable. It is going to take leadership. We are going to have to address the problems in a practical way. We have done it before in this country and I believe we can do it again. When we as Americans address problems head on we solve them.
Our government spent all the money in social security on other things. We need to privatize the system or do away with it period. I’d like to keep that money each week and do what I want to do with it, not send it to Washington for them to blow