published Sunday, August 28th, 2011

Fresh warning on Social Security's insolvency

With Social Security's retirement fund expected to go broke in two and a half decades, it's no real surprise that another part of Social Security -- its disability program -- is projected to run dry far sooner, in 2017.

Retiring baby boomers and workers who have lost their jobs are flooding the disability portion of Social Security with benefit claims, pushing it toward bankruptcy just six years from now. That has led to calls to shuffle money out of Social Security's retirement fund and into its disability program -- but that would just hasten the day when the retirement fund itself goes broke.

It's also predicted that Medicare will run out of money in the next decade or so.

Don't these alarming projections show that it's past time for Congress to stop procrastinating and to focus on reform of entitlement programs -- both to secure the programs for those who have paid into them and to get a handle on our national debt? We cannot keep denying the need for reform, however painful it may be.

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nucanuck said...

The money that Americans have paid into Social Security for pensioners has been spent on other things. The Social Security taxation formula should be reformed, but never again should the government be allowed to rob the Social Security fund to spend elsewhere.

General tax rates should be raised to replace the money taken from Social Security.

August 28, 2011 at 9:55 a.m.
macropetala8 said...

All social security has to do is start calling in all those loans other agencies robbed from them over the years. Forgiving those loans, what the Republicans want because they're the ones who had their hands deepest in the SS pot over the years, should not be an option.

"to get a handle on our national debt?"

Furthermore, the above statement (bold) is flawed. As SS adds nothing to the national debt.

August 28, 2011 at 12:55 p.m.
fairmon said...

Money owed to the social security fund is part of the national debt. The federal government accounts for funds that are supposed to be there but aren't by showing it as a debt. The fund is issued treasury notes or bonds at the prevailing rate which means very little interest paid on bonds issued at this time.

Disability was not initially included and should not be part of the social security system. The disability, survivor and other liberalizations have been added as very popular vote pandering initiatives. There are no separate provisions for funding the social security disability plan. The disability provisions are a welfare program and should be called and funded as such if it it to be funded. A better alternative would be to require any potential participant to purchase long term disability insurance.

August 28, 2011 at 3:31 p.m.
EaTn said...

We do not have a Social Security problem..what we have is a political problem from Congress who have robbed the system in the past and now are not willing to step-up and plan the funding required to keep it solvent for years to come. It may not be the optimum retirement system, but it has and will continue to provide a necessary safety net.

August 28, 2011 at 5:42 p.m.
rolando said...

It is not a funding issue, EaTn; the problem is the expansion of the program to cover those never intended to be part of it -- disability, survivor, dependent child, everything and everyone under the sun...to include those who have never paid a cent into the System. It is now a glorified welfare operation...no doubt the Congress will take [again] from those who paid in and give to those who are not qualified.

August 28, 2011 at 8:22 p.m.
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