Social Security Soon Will Slide Into Insolvency

By Robert Weisman – Re-Blogged From The Boston Globe

Some time next year, as the ranks of retirees swell, the Social Security system in the United States will pass an ominous tipping point and start the slide into insolvency.

For the first time in nearly four decades, the government program that provides retirement checks to older Americans will pay out more in benefits in 2020 than it takes in. That will force the program to dip into a rainy day fund that will be depleted in about 15 years.

And if the political dysfunction in Washington continues and lawmakers don’t fix the system, benefit cuts are in store for current and future retirees, most of whom haven’t socked away enough money in their personal retirement accounts.

Senator Bernie Sanders, Independent of Vermont, wants to expand Social Security, even as the program will pass an omnious tipping point.
Senator Bernie Sanders, Independent of Vermont, wants to expand Social Security, even as the program will pass an omnious tipping point.(Mark Wilson/Getty Images/File)

National Debt Is An ‘Economic Threat’ To The US

By Mac Slavo – Re-Blogged From Freedom Outpost

In an incredibly obvious statement, National Security Advisor John Bolton has declared the high level of national debt an “economic threat” to the United States. Unless you have been living under a rock for the past ten years, you know that statement is not only true but obvious.

Bolton claimed that the national debt is a big problem and tackling it requires significant cuts to the government’s discretionary spending, while most other economic experts say entitlement spending is the biggest concern. According to Bloomberg, Bolton was quoted as saying: “It is a fact that when your national debt gets to the level ours is, that it constitutes an economic threat to the society. And that kind of threat ultimately has a national security consequence for it.”

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Spending Our Way to a Fiscal Crisis

By Ron Paul – Re-Blogged From Freedom Outpost

According to financial writer Simon Black, the federal government is spending approximately 52,000 dollars per second. This, not last year’s tax cuts, is the reason why the national debt has reached a record 21 trillion dollars, which is more than America’s gross domestic product (GDP).

Another ominous sign is that this year both Social Security and Medicare will have to draw down on their reserve funds to be able to pay benefits. The Social Security and Medicare trust funds will both soon be bankrupt, putting additional strains on the federal budget and American taxpayers.

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Trustees Report: Medicare to Go Broke 3 Years Sooner

By Associated Press – Re-Blogged From Newsmax

Medicare will run out of money sooner than expected, and Social Security’s financial problems can’t be ignored either, the government said Tuesday in a sobering checkup on programs vital to the middle class.

The report from program trustees says Medicare will become insolvent in 2026 — three years earlier than previously forecast. Its giant trust fund for inpatient care won’t be able to fully cover projected medical bills starting at that point.

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Phasing Out Social Security

cropped-bob-shapiro.jpg   By Bob Shapiro

Social Security is in trouble. Money going out should exceed money coming in within three years. Of course, the current income on the Treasuries in the Trust Fund are counted as real, even though those Treasuries are little more than IOUs from Uncle Sam’s left pocket into his right pocket. In real world terms, the Trust Fund already is in Deficit.

Even with the rosy Treasury assumption, the Trust Fund balance should be zeroed out within 15-20 years, depending on whose projections you use.

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Economics Professor Laurence Kotlikoff of Boston University calculates that the actuarial deficit is around $100 Trillion, so anyone who says that we can tinker here and adjust there to save Social Security is just not living in the real world.

Social Security is dying. Social Security will end. The only question is whether it ends in a collapse – causing tens of millions of retirees to become destitute overnight – or whether Social Security is phased out, allowing current retires to get all they expect.

I suggest a phase out – a very long phase out.

  1. Today, end filing for early retirement for Social Security benefits. Seniors who already are receiving early benefits may continue, but no further applications will be accepted or processed. Transfer all non-retirement portions into one of the Welfare programs.
  2. For all Americans currently over 60 years of age, they may file and receive full Social Security benefits when they reach the current full retirement age.
  3. For all Americans currently under 60 years old, their full retirement age will be raised by one month for every two months until they reach 60. For example, a 50 year old has 120 months before he reaches 60, so his retirement age will be 60 months later than the current full retirement age.

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  4. Americans under 60 may choose to opt out of Social Security. By opting out, they forfeit any accrued Social Security benefits. They will be allowed to deposit their FICA deduction tax free into a Roth IRA – that’s double Tax Free. The employer match, and self-employment tax, will continue to go into the Social Security Trust Fund. (This will cause large deficits near term but large surpluses down the road.)
  5. At some point, every American will be off Social Security, either by dying or by opting out. Any money remaining in the Trust Fund will go into the General Revenue Fund.
  6. Employer match after that point either:
    1. May be ended
    2. May go into the General Fund
    3. May by added to the employee’s Roth IRA

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This phase out easily could take 60 years to complete. It will not be painless as the younger an American is, the less he will receive in benefits. But, it will put the burden where it can be handled most easily – with younger workers who have more time to plan. And, it sets up a system which still requires putting money aside for retirement, but that money is owned and controlled by each individual American worker.

It should be noted that Medicare is under the same pressures, also with a calculated actuarial deficit around $100 Trillion. A similar phase out for Medicare also makes sense.

 

Three Big Stories NOT Being Covered Part 3

By Andy Sutton & Graham Mehl – Re-Blogged From http://www.Gold-Eagle.com

The third and final (for now) portion of this series might be a tad anticlimactic. If so, we apologize. Most people know America is in debt beyond comprehension. A small subset of people understand that the numbers published by the government are missing a whole bunch of important items and use accounting methods that would land most business people in prison. An even smaller subset understands the idea of generational accounting.

What we are going to discuss this time around is not the long-term situation, but rather the medium to short-term situation because some really bad things are going to take place within the next 5-7 years absent major, MAJOR policy changes. At that point, the policy changes will have to be drastic since our government fiddled while Rome burned for the last 3 decades.

If you take nothing else away from this article, understand that our ‘leaders’ – of all political affiliations and stripes – KNEW this was going to be the result if they did nothing, yet that’s precisely what they did. The blame game this time around ought to be one for the ages, however a well-informed populace can short-circuit the traditional mudslinging by inserting the following statement: “You all knew. You knew and you did nothing. You are guilty of dereliction of duty. You failed your constituents and your country. ALL of you.”

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Maine Food Stamp Work Requirement Cuts Non-Parent Caseload by 80 Percent

By Robert Rector, Rachel Sheffield and Kevin D. Dayaratna – Re-Blogged From The Heritage Foundation

The food stamp program is the nation’s second largest means-tested welfare program; its costs have risen from $20.7 billion in 2000 to $83.1 billion in 2014. Contributing to this rapid expansion is the enrollment of able-bodied adults without dependents, which has risen from nearly 2 million in 2008 to around 4.7 million today. Benefits to these individuals and related administrative expenses cost the taxpayers around $10.5 billion per year. Welfare should not be a one-way handout. In keeping with the success of both the 1990s welfare reform and Maine’s recent food stamp work requirement, the U.S. government should require constructive behavior from able-bodied recipients in exchange for benefits. Specifically, able-bodied adult food stamp recipients without dependents should be required to take a job, prepare for work, perform community service, or at a minimum search for employment in exchange for aid and assistance at the taxpayers’ expense. This reform would save taxpayers $9.7 billion per year. Continue reading