POLITICAL observations & opinions

* those who argue that Social Security is well funded, take heed … the facts seem otherwise … if you disagree, please post comments with facts, not simply dissenting opinions

Posted by Lew Weinstein on August 21, 2011

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Stephen Ohlemacher of AP writes (8/21/11) …

  • Laid-off workers and aging baby boomers are flooding Social Security’s disability program with benefit claims, pushing the financially strapped system toward the brink of insolvency.
  • Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can’t find new ones in an economy that has shed nearly 7 million jobs.
  • New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts.
  • About two decades later, Social Security’s much larger retirement fund is projected to run dry as well.

read the entire article at … http://news.yahoo.com/social-security-disability-verge-insolvency-090119318.html

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2 Responses to “* those who argue that Social Security is well funded, take heed … the facts seem otherwise … if you disagree, please post comments with facts, not simply dissenting opinions”

  1. Chris said

    Far from being the reason that the U.S. government is bankrupt, the Social Security payroll tax over the years 1984-2009 has contributed $2 trillion more to government revenues than has been spent on Social Security and Medicare benefits, as the U.S. government’s own annual Social Security Reports make clear. The government took the $2 trillion from the Social Security Trust Fund, stuck non-marketable IOUs in its place, and spent the money, thus reducing its need to tax or borrow by $2 trillion over the period.

    by Paul Craig Roberts Trend Research Institute

    • Jonathan said

      Chris,

      Good to point out the way the federal government has used the Social Security Trust Fund. Leaving this federal retirement plan unfunded is exactly the kind of accounting the federal government has long prosecuted and tried to correct in the corporate sector. Of course, the federal government will not default on Social Security payments; it will change the system before that happens.

      I do have a relevant thought on the data presented, however.

      The 25-year period cited in the report corresponds to the working years of the Baby Boomer generation. This means that the largest cohort of working Americans ever (I think), was funding a system to support those who were drawing from Social Security from 1984-2009 (i.e., primarily those born between 1920 and 1944).

      If I understand correctly, the problem that exists is due to the retirement of Baby Boomers and the lack of an equally large number of working Americans to fund the Boomers’ retirement years. Payments from 2010-2034 will not cover the retirement needs of those Boomers drawing from Social Security during those years.

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