Originally published August 20 2015
Social Security will be worthless by 2033: Here's the mathematical proof
by J. D. Heyes
(NaturalNews) It's become nearly a given among most Americans under the age of 45: By the time they are old enough to qualify for Social Security benefits, there won't be any left to dole out.
The bad news is, that's partially true. The good news is, that's only partially true.
As noted by Myra Adams, writing recently in National Review Online, the government has essentially, albeit quietly, verified the worst fears of many regarding the long-term solvency of Social Security: Namely, that it isn't, at least in its current form.
She writes:
While engaging in the mundane task of gathering financial statements for a "secure retirement" meeting with my husband's and my adviser, this Baby Boomer stumbled upon documented proof that our nation does not have the guts to confront one of its most serious economic problems. The realization came when I pulled from my files a document statement innocently titled, "Your Social Security Statement."
The clock is ticking
On closer examination, Adams found some notations on her statement that serve to rebut any argument by members of Congress or the president that the Social Security trust fund is completely solvent.
"At first glance, the statement did not appear menacing. I was told I could expect to receive a benefit of 'about $2,136 a month' upon reaching age 70 — which certainly seems like good news," Adams wrote. "But immediately I thought of a parallel of President Obama's infamous Obamacare promise: 'If you like your Social Security, you can keep your Social Security.' Then, as if on cue, I saw an asterisk with the following message: 'The law governing benefit amounts may change because, by 2033, the payroll taxes collected will be enough to pay only about 77 percent of scheduled benefits.'"
So, in reality, that became, "If you like your Social Security, you can keep 77 percent of it."
This, despite the fact that Adams had been making full contributions to Social Security since 1971, when she was 16, on the promise of receiving full benefits.
But that wasn't the worst of what she discovered. After reading the fine print regarding anticipated reductions in benefits, she began combing through older Social Security statements. On a statement dated March 10, 2009, she found: "The law governing benefit amounts may change because, by 2041, the payroll taxes collected will be enough to pay only about 78 percent of your scheduled benefits."
That meant the government's 2009 funding prediction was overly generous. In reality, the timeframe for full benefits is shrinking while the overall percentage of benefits that Uncle Sam is willing to shell out shrinks as well.
"Does anyone really expect these numbers to get better?" Adams asked, rhetorically, in her column.
No one should. In fact, for anyone familiar with the government's long-term entitlement obligations, this should be old news.
No one in D.C. seems to care
Consider:
-- For years the "unfunded liabilities" gap between anticipated income and government outlays has hovered around the $100 trillion mark. It's hard to imagine that much money in the entire world but to put it in perspective, it would take every single dollar generated in the U.S. economy (about $17 trillion per year) five years to pay that off. Not going to happen.
-- The Social Security and Medicare Boards of Trustees have repeatedly warned that neither of those entitlements is "sustainable" over the long run. The problem: Too little funding, too many beneficiaries. Two things need to happen – the age of entitlement needs to rise as the average life expectancy has risen and more taxes are needed to fund both, and there's no political will in Congress to do either.
-- The public in general has to accept that these benefits are simply not going to remain viable and as such, dramatic reforms will be needed (to include those above but also, perhaps, to include other major changes such as privatization). But the last president to attempt to change this equation – George W. Bush – was savaged in the media and by political opponents. So nothing changed.
Right now, as Adams has so eloquently demonstrated and as the trustees of both Medicare and Social Security have warned, the next generation of Americans will face major cuts to programs they are expected to contribute to now, and fully.
What kind of political repercussions do you think this disparity will create in the near future? From the looks of it, few of today's political leaders seem to care.
Find more news on the impending economic collapse at Collapse.NEWS
Sources:
NationalReview.com
Money.CNN.com
U.S.DebtClock.org
SSA.gov
All content posted on this site is commentary or opinion and is protected under Free Speech. Truth Publishing LLC takes sole responsibility for all content. Truth Publishing sells no hard products and earns no money from the recommendation of products. NaturalNews.com is presented for educational and commentary purposes only and should not be construed as professional advice from any licensed practitioner. Truth Publishing assumes no responsibility for the use or misuse of this material. For the full terms of usage of this material, visit www.NaturalNews.com/terms.shtml