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Last week, a group of analysts published an astonishing report about the future of Social Security in the United States, and their remarks were nothing short of damning.
According to their calculations, for example, these analysts claim that Social Security is already running a huge deficit to the tune of tens of billions of dollars each year.
In fact, this Social Security funding deficit has been taking place for several years now, and it’s actually accelerating. So the problem worsens each year.
The vast majority of Americans who expect to retire in the next decade can count on little income other than their Social Security. This is true not only for low-income workers, who have struggled most of their lives, but also for millions of middle-income workers. Although Social Security is a tremendously important program, and provides a solid base that retirees can depend upon, its $16,000 average annual benefit doesn’t go very far. Many if not most can expect to see sharp reductions in living standards.
In the 2015 report of the Social Security and Medicare Board of Trustees they state very plainly:“Social Security as a whole as well as Medicare cannot sustain projected long-run program costs…”, and that the government should be “giving the public adequate time to prepare.”
On August 14, 1935, President Franklin Roosevelt arrived at his desk to sign the Social Security Act into law.
It had been a contentious legislative process, something like the Obamacare of its day.
– Social Security Disability Insurance Program Is Financially Unsustainable (Mercatus Center, Sep 2, 2015):
The 2015 annual report from the Social Security Board of Trustees shows that the program’s disability component is in immediate trouble. Data from the latest report show that the disability fund will be depleted as soon as next year and unable to pay full benefits to beneficiaries.
– Lawyers Scalp $1.2 Billion From Social Security In 2013 (ZeroHedge, Dec 8, 2014):
Social Security Disability Insurance (SSDI) is no small program, costing taxpayers more than the combined cost of federal welfare payments, housing subsidies, food stamps and school lunches. Attorneys receive taxpayer-funded fees each time they successfully place a client in the program, which incentivizes them to encourage clients to file disability claims. The fees are capped at 25 percent of the successful client’s SSDI award, or $6,000, whichever is less. Attorneys took in $1.2 billion in such fees in 2013, up from just $425 billion in 2011.
– We’re Relying on Phantom Wealth to Fund Our Retirement (Of Two Minds, Aug 12, 2014):
Phantom wealth cannot possibly fund unprecedented retirement and healthcare promises.
The narrative that Social Security, Medicare and pension funds invested in stocks and bonds can fund the retirement of 65 million people is a misleading fantasy. The sad reality is we can’t fund the enormous expense of retirement/healthcare for 20% of the populace out of our national earned income, and the savings that have been set aside are either fictitious (the Social Security Trust Fund) or based on phantom wealth created by speculative asset bubbles in stocks, bonds and real estate.
– Social Security, Treasury target taxpayers for their parents’ decades-old debts (Washington Post, April 10, 2014):
A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.
When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.We do the math on the Obama administration’s surprising claim about for-profit education programsNow, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.
– Retirement Unlikely For Many Blue-Collar Americans (Dec 31, 2013):
WASHINGTON – Tom Edwards grew up in a family that’s been cutting trees and hauling timber in the Pacific Northwest for more than a century. The Spanaway, Wash., resident says he has worked as a logger since he was a kid — it’s just what an able-bodied youngster was expected to do.
Now, at 53, with business in a slump and little money in savings, he’s pessimistic about his chances of retiring.
“It’s never going to happen. By the time I reach retirement age, there won’t be Social Security. There’s not going to be any money,” Edwards said. “I’ll do like my father did: I’ll work ’til I die.”
– Killing The “We Paid Our Taxes; We Earned Our Benefits” Social Security Ponzi Meme ( Ludwig von Mises Institute,, Nov 22, 2013):
“We paid our Social Security and Medicare taxes; we earned our benefits.” It is that belief among senior citizens that President Obama was pandering to when, in his second inaugural address, he claimed that those programs “strengthen us. They do not make us a nation of takers.”
If Social Security and Medicare both involved people voluntarily financing their own benefits, an argument could be made for seniors’ “earned benefits” view. But they have not. They have redistributed tens of trillions of dollars of wealth to themselves from those younger.
Social Security and Medicare have transferred those trillions because they have been partial Ponzi schemes.
– Social Security Warns Benefits Could Get Cut (Wall Street Journal, Oct 7, 2013):
The Social Security Administration has begun warning the public it cannot guarantee full benefit payments if the debt ceiling isn’t increased.
When asked by the public, the agency is notifying beneficiaries that “Unlike a federal shutdown which has no impact on the payment of Social Security benefits, failure to raise the debt ceiling puts Social Security benefits at risk,” according to a person familiar with the agency directive.
– Insolvent Spain Forced To “Borrow” From Social Security Fund To Pay Pensions (ZeroHedge, July 22, 2013):
Spain’s slow-motion implosion into an insolvent singularity has been one of the most amusing sideshows for over a year. The chief reason for this is the sheer schizophrenic and absurdist polarity between the sad reality, visible to everyone, and the unprecedented propaganda by the government desperate to paint a rosy picture. While on one hand the economic data shows very clearly the painfully obvious sad ending for this chapter of European integration, it continues to be punctuated almost daily by such amusing confidence games as Spain’s Economy Minister de Guindos telling anyone who cares to listen that the labor market is improving “beyond the seasonal pick up” and that Q2 GDP would be close to zero (because 0% GDP is the new killing it). That’s the good news. The bad news is that as Reuters reports, and contrary to fairy tales of unicorns and soaring 0% GDP, Spain’s government is so insolvent, it was just forced to “borrow” from its social security reserve to fund pension payments.
Spain tapped its social security reserve fund for the second time in a month on Monday, the Labour Ministry said, to help with extra summer pension payments as unemployment and retirement costs deplete government funds.
The government turned to the fund for 3.5 billion euros ($4.6 billion) on July 1 then for a further 1 billion euros on Monday. Spanish pensioners receive two cheques in summer and two over the Christmas holidays.
– 40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe (Economic Collapse, May 26, 2013):
If you know someone that actually believes that the U.S. economy is in good shape, just show them the statistics in this article. When you step back and look at the long-term trends, it is undeniable what is happening to us. We are in the midst of a horrifying economic decline that is the result of decades of very bad decisions. 30 years ago, the U.S. national debt was about one trillion dollars. Today, it is almost 17 trillion dollars. 40 years ago, the total amount of debt in the United States was about 2 trillion dollars. Today, it is more than 56 trillion dollars. At the same time that we have been running up all of this debt, our economic infrastructure and our ability to produce wealth has been absolutely gutted. Since 2001, the United States has lost more than 56,000 manufacturing facilities and millions of good jobs have been shipped overseas. Our share of global GDP declined from 31.8 percent in 2001 to 21.6 percent in 2011. The percentage of Americans that are self-employed is at a record low, and the percentage of Americans that are dependent on the government is at a record high. The U.S. economy is a complete and total mess, and it is time that we faced the truth.
The following are 40 statistics about the fall of the U.S. economy that are almost too crazy to believe…
– Auditing The IRS: “Is There Any Limit To The Scope Where You Folks Can Go?” (ZeroHedge, May 18, 2013):
While it does have all the impromptu genuineness of a made for C-Span soap opera, the following exchange between Rep. Mile Kelly (PA) and the IRS’ commissioner Miller was the highlight of yesterday’s grilling of the IRS by the House Ways and Means committee, because rehearsed or not, it does capture the prevalent sentiment the US public harbors not only toward its tax collectors, but the government in general.”
The IRS can do almost anything they want to anybody they want any time they want. This is very chilling for the American people…. This is a Pandora’s box that has been opened. The American people should be outraged and they are. This has nothing to do with political parties – this has to do with highly targeted groups. This reconfirms everything that the American public believes. This is a huge blow to the faith and trust the American people have in their government. Is there any limit to the scope of where you folks can go? Is there there any question that you should have asked: how much money do you have in your wallet, who do you get emails from, whose sign do you put up in your front yard: this ia tax question? The fact that you all can do just about anything you want to anybody: you can put anybody out of business any time you want…. I think the American people have seen what’s going on right now in the their government. This is absolutely an overreach and this is an outrage for all Americans.“
And while contemplating these questions, let’s make government even bigger, and also why has that pesky Second amendment not been overturned yet?
– Obama seeks deal, proposes cuts to Social Security (AP, April 5, 2013):
WASHINGTON (AP) — Seeking an elusive middle ground, President Barack Obama is proposing a 2014 budget that embraces tax increases abhorred by Republicans as well as reductions, loathed by liberals, in the growth of Social Security and other benefit programs.
The plan, if ever enacted, could touch almost all Americans. The rich would see tax increases, the poor and the elderly would get smaller annual increases in their benefits, and middle income taxpayers would slip into higher tax brackets despite Obama’s repeated vows not to add to the tax burden of the middle class. His proposed changes, once phased in, would mean a cut in Social Security benefits of nearly $1,000 a year for an average 85-year-old, smaller cuts for younger retirees.
– Chief Actuary for SS – Raid the Retirement Fund! (ZeroHedge, March 20, 2013):
Stephan Goss, the chief actuary for Social Security (SS) provided a detailed report on the status of the SS Disability Fund (DI) to the House of Representitives. The short story is that DI is going bust in a few years. The options to fix this problem were spelled out in the report. The extremes of the required “fix” range from an immediate cut in DI benefits of 16%, or an increase in DI payroll taxes of 20%.
Nothing new there. But, there is a “Plan B” for the DI Fund. The solution is to raid the SS Retirement Fund for the deficits at DI:
– Have Americans Given Up on Saving for Retirement? (TIME, March 7, 2013):
In the wake of the Great Recession, retirement-minded Americans are feeling an unprecedented amount of futility. They are undersaved and — worse — see little reason to do anything about it.
That’s the alarming conclusion in a new report from the Deloitte Center for Financial Services, which found that 60% of preretirees believe health care costs will consume their savings no matter how much they save. Similarly, 39% believe investment returns won’t be high enough to provide decent retirement income regardless of how much they manage to put away.
Deloitte found exasperation at every turn: 58% don’t have a retirement plan; nearly 40% don’t know what an annuity or mutual fund is; and 20% expect to rely purely on Social Security for their retirement needs. More than half don’t trust anyone’s advice.
– Do You Want To Scare A Baby Boomer? (Economic Collapse, Jan 17, 2013):
If you want to frighten Baby Boomers, just show them the list of statistics in this article. The United States is headed for a retirement crisis of unprecedented magnitude, and we are woefully unprepared for it. At this point, more than 10,000 Baby Boomers are reaching the age of 65 every single day, and this will continue to happen for almost the next 20 years. The number of senior citizens in America is projected to more than double during the first half of this century, and some absolutely enormous financial promises have been made to them. So will we be able to keep those promises to the hordes of American workers that are rapidly approaching retirement? Of course not. State and local governments are facing trillions in unfunded pension liabilities. Medicare is facing a 38 trillion dollar shortfall over the next 75 years. The Social Security system is facing a 134 trillion dollar shortfall over the next 75 years. Meanwhile, nearly half of all American workers have less than $10,000 saved for retirement. The truth is that I was being incredibly kind when I said earlier that we are “woefully unprepared” for what is coming. The biggest retirement crisis in history is rapidly approaching, and a lot of the promises that were made to the Baby Boomers are going to get broken.The following are 35 incredibly shocking statistics that will scare just about any Baby Boomer…
– The Social Security System Is Already Broke (ZeroHedge, Jan 12, 2013)
– The Federal Government Hands Out Money To 128 Million Americans Every Month (Economic Collapse, Jan 10, 2013):
The number of Americans receiving money directly from the federal government has grown from 94 million in the year 2000 to over 128 million today. A shocking new research paper by Patrick Tyrrell and William W. Beach contains that statistic and a whole bunch of other very revealing numbers. According to their research, the federal government hands out money to 41.3 percent of the entire population of the United States each month. Overall, more than 70 percent of all federal spending goes to what they call “dependence-creating programs”. It is the most massive wealth redistribution scheme in the history of the world, and it continues to grow at a very rapid pace with each passing month. But can we really afford this? Of course we never want to see a single person go without food to eat or a roof to sleep under, but can the federal government really afford to support 128 million Americans every month? If millions more Americans keep jumping on to the “safety net” each year, how long will it be before it breaks and it is not there for anyone? The federal government is already drowning in debt. This year the U.S. national debt will easily blow past the 17 trillion dollar mark and we are rapidly heading toward financial oblivion. We are stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day with no end in sight. If we don’t get our finances in order as a nation, what will the end result be?