The fiscal black hole surrounding Social Security and Medicare had been talked about long before mankind got its first glimpse of the interstellar phenomenon. Like the particles and electromagnetic radiation absorbed in the galactic monster’s path, the American people face an event horizon, a point of no return. Unless drastic actions are taken by good folks in the swamp, the only hope for the next generation of retirees is that scientists discover a wormhole connecting this reality with an alternative universe that practices prudence and responsibility.
Social Insecurity and Medican’t
According to the Social Security Administration’s trustee report, the cost of maintaining this entitlement program will exceed the revenue it generates next year. The last time this happened was in 1982.
Last year, SS received $1.003 trillion in income, including $885 billion from the payroll tax, $83 billion in interest, and $35 billion from taxing benefits. At the same time, it spent about $1 trillion: $988.6 billion on benefits, $6.7 billion on administration, and $4.9 billion on retirement expenses.
With the 1.8% cost-of-living adjustment (COLA) later this year, SS expenses will exceed the money it receives. Based on current trends, SS will exhaust its reserves by 2035 and officially be insolvent. The other disappointing takeaway is that the projected bankruptcy date is one year sooner than previous estimates.
Medicare also faces a gaping budget hole. The overseers of this government benefit say it is slated for bankruptcy by 2026. This would result in hospitals, nursing homes, and other medical care providers receiving only a portion of their payments.
It isn’t all bad news. Social Security’s disability program is expected to remain in the black for an extra 20 years to 2052.
The report concludes by urging lawmakers to “take action sooner rather than later to address these shortfalls, so that a broader range of solutions can be considered and more time will be available to phase in changes while giving the public adequate time to prepare.”
Authors presented some recommendations. For instance, to save Medicare, it has been suggested to raise the payroll tax by 0.91 percentage points or cut 19% in spending.
It is unclear what Republicans and Democrats plan to do about the pending financial Armageddon, except offer vague statements about tackling the problem. Any time someone presents a concrete and reasonable solution, such as raising the eligibility age or performing a means-test on benefits, it gets shouted down by the establishment as a war on seniors, which is code for “we will get the elderly vote!”
Rep. Steve Womack (R-AK) says the nation “cannot afford to ignore this reality any longer”:
“The programs that millions of Americans pay in to and expect to have in the future are going broke — driving up federal spending, growing our deficits, and crowding out other priorities in the process.”
For now, President Donald Trump has repeatedly said that cuts are not on the table. But a handful of Democratic presidential candidates propose that expanding Medicare is possible despite its depleting finances; they also think a basic income, free tuition, and slave reparations are practical ideas when the nation is crippled by $22 trillion in debt and $200 trillion in unfunded liabilities and expenditures, so what does that tell you?
Doom and Gloom
The pending insolvency of these programs is a drain on the economy and capital investment. Despite spending nearly $2 trillion, or 45% of the federal budget, every year on Social Security and Medicare, they are drowning in red ink, and there is no relief in sight. The analysts blame these developments on the growing number of retirees, but it could be much more than that.
For years, politicians have been known for kicking the can down the road; that can isn’t just dented, it has been crushed by too many loafers and high heels. These esteemed ladies and gentlemen have refused to engage in the present, choosing to allow future generations to handle their own gross incompetence. Well, it looks like millennials and Generation Z will be unable to enjoy their winter years. Instead, they will be left out in the cold, working until they are six feet underground or ashes in an urn.
Thanks, government! The people knew they could count on you.
At Liberty Nation, we love to hear from our readers. Comment and join the conversation!