NO TRUST AND NO FUND
Congress Has Drained the Social Security Trust Fund Dry
This is the section of our site dedicated to keeping our supporters informed about the government's latest moves to raid the Social Security and Medicare trust funds. Check back periodically to stay up to date on the raid. Make this page your headquarters for all things Raid related.
*NEWEST RAID REPORT*
The Social Security crisis is real
Originally Posted At The Daily Caller
By Phil Kerpen
August 16, 2010
Paul Krugman’s astonishingly incorrect column about Social Security’s finances is based on the premise that anticipated deficits in the Social Security program may never materialize. A couple of years ago, he could have made that claim with a very slight chance of being correct. This year, facts have already overtaken his weak argument: the CBO reported earlier this year that Social Security is already spending more in benefits than it collects in taxes, which the program’s own trustees confirmed last week.
The cash-flow deficit matters because the so-called Social Security Trust Fund that has supposedly been accruing value since 1983 has already been raided and spent by Congress on unrelated programs. In its place are a bunch of IOUs from the general fund of the Treasury. With the program now running deficits, those IOUs are being redeemed – but because Congress has already spent the money, it has to be replaced with cuts to other spending, new taxes, or more federal borrowing. In other words, precisely the options that would be available if the trust fund didn’t exist at all.
Read More. . .
Social Insecurity
Originally Posted At Mises Daily
by Paul Cwik
August 13, 2010
Oh joy, oh joy! It has finally arrived! You wouldn't believe how excited I was to receive a letter from the Social Security Administration. In the letter, they dutifully showed me how much taxable income I have ever made. (Is it me, or is there something really creepy about that?) They showed me how much I have paid in taxes and how much my employer also "paid." Then they showed me how much my payment would be if I retire at full retirement (67 years old — not 62 or 65 like you may have heard) and if I delay "collecting" until I turn 70.
It is no secret that I turn 40 this year. That means I have another 30 years of work in front of me. I have (for fun) just taken an online life-expectancy survey, and it says that I will live until the age of 86. So let's assume that these numbers are correct. I will work for another 30 years and then have 16 years to spend it all.
According to the Social Security Administration, I will receive $2,522 a month during those 16 years. The value of that money when I turn 70 is a present-annuity-value calculation. For the purpose of this example, let's pick an easy interest rate of 5% per year. So the value of the Social Security payments (compounded monthly) for 16 years at annual rate of 5% is $335,444.57. In other words, for me to privately do the same as Social Security, I will need to have $335,444.57 in cash when I turn 70 and deposit it in a security that has a 5% annual return.
Read More. . .
Social Security in the red for first time ever
Originally Posted At The Washington Times
August 5, 2010
By Stephen Dinan
Social Security will pay out more this year than it gets in payroll taxes, marking the first time the program will be in the red, according to the annual authoritative report released Thursday by the program's actuary.
Meanwhile President Obama's health care overhaul has given Medicare's basic Hospital Insurance an extra 12 years of financial stability, though it did not solve all of the program's long-term challenges.
"The financial status of the HI trust fund is substantially improved by the lower expenditures and additional tax revenues instituted by the Affordable Care Act," the program's actuary said in its annual report. "These changes are estimated to postpone the exhaustion of HI trust fund assets from 2017 under the prior law to 2029 under current law and to 2028 under the alternative scenario."
But the actuary said the programs' finances are still troubled in the near and long terms, and warned that Congress is making things worse by putting off scheduled doctor fee cuts.
The Obama administration said the report shows the success of the health care overhaul, which passed earlier this year on the strength of Democratic votes.
"The impact of health care reform is made clear by the Trustees Reports, which show some very positive developments for Social Security and especially Medicare," said Treasury Secretary Timothy F. Geithner. "But they also remind us that we must continue to make progress addressing the financing challenges facing the long-term solvency of these programs."
Some of the grimmest immediate news comes in Social Security, where benefit payouts will exceed revenues for the first time ever — six years earlier than last year's report projected.
The deficit will last through 2011, then an improving economy will put it back into balance for three years, then it will dip back into the red in 2015, the actuary said. The program has enough money in its trust fund to cover the annual deficit for two decades beyond that.
Social Security Goes into Deficit
Originally Posted At The Atlantic Magazine
MAR 25 2010
By Megan McArdle
Every since the early eighties, when the Greenspan commission kicked the can down the road with a combination of tax increases and later retirement ages, analysts have been awaiting the day when the system would finally go into deficit. That date has been sliding around between 2016 and 2020 for some years now, but the suspense is finally over: the system is going into deficit this year.
" . . . payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program's revenue has fallen sharply, because there are fewer paychecks to tax."
According to the CBO report from which that article is drawn, the deficit will persist until around 2014, at which point it will go temporarily back into surplus before returning permanently to the red in 2018. This is a small but permanent deterioration of the program's finances--the people who have retired early will pay no more FICA taxes, and they'll have less in the way of taxable Social Security benefits.
Meanwhile, at a time when tax revenues are already hurting bad, this will force the general fund to subsidize Social Security, rather than the other way around.
This is the canary in the coal mine; if Social Security's finances are in trouble, Medicare's will also be looking worse. While I was at the Kauffman Foundation's economics blogger forum last Friday, a show of hands indicated that about 80% of the people there thought America would have a serious fiscal crisis in the next two decades. This is how it starts--not with a bang, but with a moderate decline in revenues.
Megan McArdle is the business and economics editor for The Atlantic.
Stop the Raid on Medicare before it begins
By Lawrence Hunter
February 24, 2010
President Barack Obama failed in his brazen effort to have the government takeover healthcare. The American people rejected every variant of ObamaCare run up the flagpole. A man of integrity and common sense would have accepted the will of the people and moved on. A Congress worthy of the American people it represents would have recognized they lost the Mandate of Heaven when the people rejected every bill Congress concocted, and Members of Congress would have submitted the fate of healthcare reform to the will of the people in the upcoming November elections.
Read More...
Retirement Armageddon
Social Security could be next to need a bailout
Originally Posted At The Washington Post
By Allan Sloan
February 2, 2010
Don't look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system.
A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.
Read More...
THE COMING OBAMA RETIREMENT TRAP HAS STARTED!
Originally Posted At LewRockwell.com
By Ron Holland
A democracy is nothing more than mob rule, where fifty-one percent of the people take away the rights of the other forty-nine." ~ Thomas Jefferson
Mandatory IRAs just proposed by Obama Administration on 1/25/10 is the 1st step in stealth nationalization & forced investment of our retirement benefits to support the treasury debt market! Read the veiled report in Business Week.
Looting Social Security, Part 2
Originally Posted At TheNation.com
By William Greider
January 4, 2010
He's baaack--the Wall Street billionaire who wants to loot Social Security. This time, Pete Peterson has invented his own "news network" to promote his right-wing rants about shrinking the only retirement security system available to millions of working people. Peterson styles himself as a patriot saving the nation from fiscal insolvency and has committed $1 billion to that cause (a chunk of the wealth he accumulated at Blackstone Group, the notorious corporate-takeover firm). His efforts might be dismissed as ludicrous--except money does talk in Washington, and Peterson is now buying Washington reporters to spread his dire warnings.
Read More...
The Closer You Look, the Worse It Appears; Media Has Ignored for Months
Originally Posted At News Busters
By Tom Blumer
September 24, 2009
Thanks to info "steveegg" at No Runny Eggs linked me to earlier today, I had to add the word "Annual" before "Cash Flow" at this post (at NewsBusters; at BizzyBlog) that originally appeared Wednesday. That's because the system is already running monthly deficits, and significant ones. Back in February, the system also ran a deficit. It was bad news, but because February is an unusual month containing a full month of payments but only 20 business days of collections (actually 19, since Presidents' Day is a federal holiday), I didn't think it was an indicator of a near-term problem when I noted it in early April. I was wrong.
Read More...
Medicare's Hospital Program Went Broke In 2008. Nobody Noticed.
August 11, 2009
The one-sentence admission indicated that the Federal deficit is going to climb. Medicare is politically untouchable. Old people have been promised coverage, and no politician is going to tell granny she must fork over her life's savings to pay for her own health care expenses. Not yet, anyway. Not this year.
Read More...
The Social Security Scam
Originally Posted At Ludwig Von Mises Institute
By Mark Brandly
May 26, 2009
The release of the 2009 Social Security Trustees Report indicates that the current economic crisis has negatively impacted the Social Security budget. It's now projected that by 2016 Social Security spending will exceed revenues. According to the report, the financial condition of the Social Security program "remains challenging" and "need(s) to be addressed soon." A look at the numbers shows us the severity of the Social Security budget problem.
Social Security is a "pay-as-you-go" system. This means that when you work, the government takes your money and gives it to Social Security recipients. In order to get workers to accept this system, the government promises to take other people's money and give it to you when you retire. Think of it as an exponentially larger version of Bernie Madoff's Ponzi scheme. Read More...
The Raid on Social Security
By Dr. Lawrence Hunter
March 24, 2009
Federal Officials have known for years the Social Security Trust Fund is an accounting ruse and the so-called Trust Fund surpluses were a deception. Here is what a few of them have said about it...
"We have told people it will be there forever," Hardy says. "We have told people that it's insurance. We have put myths together that have become the foundation for a religion of Social Security. Some would say that's fraudulent behavior, although I don't think that's the intent." Read More...
Stop The Raid. Stop The Tax Hike.
Phil Kerpen
February 1, 2007
Social Security has a problem even bigger than its impending insolvency—it is a terrible deal for young workers. Because I’m young, single, and male, Social Security promises me a 1.5 percent real rate of return. And that's what it promises—not what it can actually afford to pay, which is more like half a percent. That’s more like passbook interest than an investment return. Read More...
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Recent News
September 2, 2010
FactCheck.org says White House and Democrats are distorting Social Security issue: "The president claims Republican leaders are as eager to 'privatize' Social Security as they are to repeal his health care law. That's not true."
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August 22, 2010
According to sources who watch the inner workings of the federal government, a smackdown of Barack Obama by the U.S. Supreme Court may be inevitable.
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August 20, 2010
Many Washington insiders predict that any 2011 debate on Social Security will focus on the issues of benefit cuts and tax increases. In addition to raising the retirement age, which is now set to reach age 67 in 2027, specific cuts under consideration include lowering benefits and trimming annual cost-of-living increases.
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August 18, 2010
The private lives of young people are now so well documented on the internet that many will have to change their names on reaching adulthood, Google’s CEO has claimed.
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August 16, 2010
President Obama claimed that Republican leaders are pushing to make "privatizing Social Security a key part of their legislative agenda" should they regain control of the House and Senate. He said this is "right up there on their to-do list with repealing" parts of the new health care law. FactCheck.org finds the president’s claim to be mostly false.
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August 16, 2010
Older workers, who typically fared better than their younger counterparts in recessions, have been hit just as hard by layoffs this time around. As a result, the fraction of people 65 or older who are working has leveled off after a long period of growth. As of July, it stood at 15.9%, down from 16.3% in mid-2008.
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