Other People’s Money
Socialism works as long as you have plenty of it. But when you run out of other people’s money to pay for it, look out.
Social Security will run a permanent yearly deficit when looking at the program’s tax revenues compared to what it must pay out in benefits, the program’s trustees said Friday in a report that found both the outlook for Social Security and Medicare, the two major federal social safety-net programs, have worsened over the last year.
Medicare’s hospital insurance trust fund is now slated to run out of money in 2024, or five years earlier than last year’s projection, while Social Security’s trust fund will be exhausted by 2036, a year earlier than the prior projection.
The trustees stressed that exhaustion of the trust funds doesn’t mean the programs will stop paying all benefits. Social Security could fund about three-fourths of benefits past 2036, and Medicare could pay 90 percent of benefits past 2024 under current trends.
And assuming no other financial surprises in the meantime. We could keep raising taxes in a down economy, but raising taxes has always been the way out of the problem of the day, but with no thought for the impact down the road. Well, here we are, down the road, with the same problem.
Filed under: Doug • Economics & Taxes • Government
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There are easy cures. Private business could create workable, functioning retirement programs, and retirement health care programs, both of which would significantly reduce demand on government programs.
That’s what business promised to do when those programs were set up.
When will private business step in to do its part of the program?
But Ed, government programs were created to supposedly deal with the problem, and yet, after billions have been spent on it, we’re still left with you asking private business to step up.
If there wasn’t a government program in place, I daresay business would have stepped in already. But the pressure of a half-baked government program that “worked” for a generation lulled American into a false sense of security. The government “solution” is part of the problem, but now you expect private business to turn on a dime and save us from this liberal boondoggle.
Wish that had been the thinking at the start.
Problem is one of a moving target. If longevity remained at 1930s levels, Social Security would be rolling in cash.
Longevity has been increasing for 75 years now (since the program was created) and Congress has been (belatedly every time) trying to play catchup with tax rates and retirement age.
I support privatization because (as far as I am aware) it is the only solution which does not redistribute income in one direction or the other.
Social Security was created to deal with the problem of poverty among seniors. It worked, and it would still be healthy but for the government’s borrowing the funds deposited to reduce deficits on paper.
It would be an easy fix for Social Security, too.
When it was passed, it was to back stop the problem then that pensions didn’t cover but a small percentage of people. Congress believed, based on testimony, that as workers’ rights improved, businesses would increase pension coverage, and Social Security would become superfluous.
But starting no later than the Reagan administration, business went the other way, in fact draining pension deposits to boost quarterly reports. Pension coverage is dropping.
Now, are you saying businesses stopped pensions because Social Security exists? That may be so — it’s immoral, it’s wrong, but it’s believable that businesses would be so crass as to claim they don’t need to pay fair wages and benefits, and push it off on the government.
You’re right: Businesses and conservatives don’t do the right thing much of the time, maybe most of the time.
I don’t expect business to turn on a dime. I expect businesses to do the moral thing, and it would have helped had they done it in 1950, instead of waiting now. You’re right again: Businesses don’t act in a timely fashion.