For the last several years it has been forecast that Social Security will take in less money than they will pay out in 2015. Now it is being forecast Social Security will start paying more out that they receive in 2010.
This should not surprise anyone who has been paying attention to the economy for the last year.
Social Security has been financing the government for over 20 years. They are holding trillions in government bonds that are supposedly redeemable upon demand. We have been paying into Social Security every time we receive a paycheck with the promise that we will receive our benefits when we qualify, whether it is retirement, disability, or survivor benefits.
I just read Allan Sloan’s article in Fortune discussing the problems that the Social Security Administration is facing. The title of the article is “The Next Great Bailout,” referring to Social Security. This title is not only erroneous but insulting to the millions of people who have been paying Social Security taxes year after year. Social Security does not need a bailout! Redemption of the trillions of dollars of government bonds they are holding is not a bail out. It is money that is owed to Social Security by the Federal government who has for years confiscated, although legally, the billions of extra Social Security taxes paid and used to make the federal deficit look smaller than it truly was. Now the Feds have to step up to the plate and pay off their debt, probably by borrowing from another source.
Allan Sloan compares the previous bailouts of “incompetent banks, faddish mortgage borrowers, General Motors, AIG, GMAC, and Wall Street” as “pigs feeding at Uncle Sam’s trough. To say the least, I loved the comparison, particularly with the almost daily news that we here about how these pigs are using the bail out money.
There is no question that Social Security needs fixing. It cannot continue paying the benefits they are currently paying and hope to continue to be solvent, especially with the onslaught of the baby boomers. Change is needed. But let’s call it what it is.
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