Comments Subscribe to Personal Liberty News Feed Subscribe to Personal Liberty
 

Social Security Cannot Go Broke

April 25, 2012 by  

Social Security Cannot Go Broke
Social Security will never go broke as long as the government can print money.

If you have looked at a news site in the past two days, you know that Social Security and Medicare are set to go broke in the next two decades, which is earlier than previously expected.

The unsurprising revelation comes from the Social Security Trustees’ annual report on the state of the government retirement and Medicare trust funds. Social Security is expected to exhaust its trust funds by the year 2033, three years earlier than last year’s projection. Medicare, while stable at the moment, will see its hospital insurance fund go broke by 2024. Social Security disability insurance, according to the report, is in the most trouble; its trust fund will be exhausted by 2016.

From the report:

Social Security and Medicare are the two largest federal programs, accounting for 36 percent of federal expenditures in fiscal year 2011. Both programs will experience cost growth substantially in excess of GDP growth in the coming decades due to aging of the population and, in the case of Medicare, growth in expenditures per beneficiary exceeding growth in per capita GDP. Through the mid-2030s, population aging caused by the large baby-boom generation entering retirement and lower-birth-rate generations entering employment will be the largest single factor causing costs to grow more rapidly than GDP. Thereafter, the primary factors will be population aging caused by increasing longevity and health care cost growth somewhat more rapid than GDP growth.

This is not breaking news. The social welfare program has long been in trouble. The increased number of retirees and decreasing number of working Americans are rendering the “pay-as-you-go” social welfare mammoth unsustainable. However, even when the fund runs dry, about three-quarters of currently scheduled benefits could be carried by the taxpayer for about 50 years, according to analysis.

Some people have called the Social Security program a Ponzi scheme for workers who will be nowhere near retirement age by 2033 and call for an “opt out” option that would allow working individuals to invest elsewhere the money taken from their checks for Social Security.

But, how then would the government fund the program?

The Federal government can print fiat money to infinity; it will always be able to pay Social Security no matter what the balance sheets say. By keeping the presses rolling, Federal officials could take the advice of one Forbes contributor who says he can fix the program for $49.99:

We’ll buy a really nice pen (that’s what costs $49.99), have one of those federal workers write “44 quadrillion dollars” on it [the Trust Fund balance], and put it in the drawer. By my calculations, this will keep Social Security solvent through 3575, plus granny will get a free lifetime supply of Werther’s Original. Entitlement crisis solved!

Or, we could just admit that the Trust Fund balance is arbitrary and bears no meaningful relationship to the government’s ability to pay Social Security benefits.

The Forbes writer’s plan essentially removes any initiative for Americans to work and save in an attempt to retire with more than just monthly government bread, because in the end they will have had their savings taxed through inflation.

Social Security is not going to go broke, despite the mainstream media’s effort to make the Nation believe it will; and whatever the “plans” to repair the social welfare system, they will quit working, saving Americans in the same place: the pocketbook.

Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

Facebook Conversations

Join the Discussion:
View Comments to “Social Security Cannot Go Broke”

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

Is there news related to personal liberty happening in your area? Contact us at newstips@personalliberty.com

  • s c

    A scam is a scam is a scam, and there’s NO scam like an Uncle Scam scam. You might as well claim that Social Insecurity is too big to fail. It’s ALREADY failed.
    It is illogical to whip a dead horse. It is worse than illogical to elect people who have NO reason to solve problems that ELECTED slime created.

    • Sirian

      Madoff didn’t mind illogical people s c, he didn’t mind them at all. You’re absolutely right, the “ELECTED slime” doesn’t mind them either. . :(

  • Neil

    OK, Obama, et. al., spends more than $3.6T per year. Tax revenues are $2.2T. The funds seized under the guise of Social Security , Medicare, and FUTA (both employee and employer contributions) are applied against the federal spending. There is no Social Security “Fund”. It is only an entry in an accounting entry. It is an unfunded liability because they already spent the funds before they are even collected.

    I do not know if “scam” or “fraud” is the word to describe this.

    • Ted Crawford

      ” There is no Social Security Fund ” That is correct. There hasn’t been one since Lyndon Johnson closed it in 1968!

    • BigBadJohn

      OK people here hate it when I show the facts but here goes AGAIN!

      01/14/2000 5,719,849,572,269
      01/12/2001 5,735,197,779,458 GW Bush inherited a 153 Billion dollar deficit

      01/15/2008 9,194,165,780,462
      01/15/2009 10,627,708,753,691 GW Bush left a 1.4 trillion dollar deficit – approximately 1000% increase!

      Obama inherited a 1.4 Trillion dollar deficit

      Last year
      01/14/2011 14,007,943,536,871
      01/13/2012 15,236,323,396,400 200 billion LESS than the deficit he inherited!

      Is Obama spending too much – hell yes! But he is spending 200 billion less than the deficit he inherited from Bush!

      Please check my numbers

      http://www.treasurydirect.gov/NP/NPGateway

      • s c

        Hotsy trotsky, comrade. Amerika, yet another utopian who’s trying to manipulate “facts.” Amerika, here’s another example of an Obummer robot. Talk about a true “oxy – moron.” Go away, comrade. Take your prozac and go away.

      • BigBadJohn

        SC please pull your head out of your dark hole and check the numbers……

        Plain simple fact REPUBLICANS have done much more damage to the USA and the national debt than democrats have.

        Do I like where Obama is taking us – no, but I also quake at the idea of republicans gaining control.

        Vote Ron Paul – the ONLY choice.

      • Alan

        Hear, hear, John. Rombama/Obamney will only continue the looting of America. Obama spending $200B less of a deficit than he inheritted must’ve been what Piglosi meant when she said: “We must keep the president from going any further to the right.” I admit, Piglosi’s mind orbits the outer rim of the universe, but really? You know, I remember when my Dad went through the roof when he heard that Jimmy “the 2nd best ex-president” Carter signed contracts for us to spend 300B on the B1 bomber. Maybe we’re finally getting the savings back on that program and O-blame-o’s goal is to have 300B less of a deficit by the time he leaves office? That’s the kind of stupidity circling DC these days, therefore, Ron Paul – 2012!

      • http://mlonnie@etczone.com coal miner

        Good post,John.

  • Donna Paquette

    I pray that Social Security Disability does not go broke. I have worked since I was 15, I am now 51. My physicians have taken me out of work due to serious health problems. At this time I am collecting SSD, this is my only income. Thanks to the “AIG” crap, (which occurred after I was taken out of work), I lost every cent of my 401K to bailouts. Why can’t they return my money??? I need it too!

    • Ted Crawford

      You might want to ask the GM and Chrysler union employees, and Solyndra, Evergreen Solar, Ener1, Tasker or mabey the members of the Interpertive Dance Company that Lisa Jackson saw fit to grant $25,000.00 of our money too. Just what could that possibly have to do with the EPA?!?!

    • James

      Sadly your money is not saved for you, a common misconception. The tax from current workers is used to pay current beneficiaries (some are retirees), and any amount over is saved. Unfortunately Pres. Johnson (Dem) took the money that was saved and put it in the general fund where it is spent. The Pres. Carter (Dem) decided to open Social Security money up to foreigners in the US who did not put anything into it as welfare. As flawed as the system is, the seeds of its early destruction were planted long ago by these presidents and congress. (Long before Obama, Clinton, “lock box” Gore, Bush.) Did any of them actually work on fixing the obvious mistakes of those who came before them, not really. My 88 year old friend went to the social security office to replace his old social security card and he said he didn’t see a single old person in the office. Everyone there collecting was young. What the hell is up with that? Where is that money going? Whatever it is, it’s been spent. I would like to depend on SS too, right now it would be all that I would have in my old age, but starting now I’ll have to plan to be on my own in a few short years. ugh.

  • nanc

    because obummer is spending it all

  • CJ

    Anybody who has taken accounting knows this is just a ‘book entry’ which creats an illusion of safety. The funds were transfered to the General Account… and SPENT years ago. It’s no different than putting your paycheck in savings, and letting your checking take it automatically. There’s no cash there, but your ‘accounting’ shows plenty in savings… only that checking needs to pay it back. Our government uses the same accounting voodoo!

  • Patriot Missle

    REALLY!!!! Social Security is running dry?? Are the politicians who granted themselves the best Social Security tax payers money can buy….is that running dry? Give the U.S. citizen the same Social Security benefits that the politicians gave themselves, & see how quickly Social Security comes back to life.

    • carrobin

      Members of Congress should have the same health insurance and Social Security “pensions” that the rest of us, their taxpayer “employers,” do. It’s only right–but it’ll never happen, because they know they’re set for life and aren’t about to change rules now.

      • old hillbilly

        pensions attract career parasites

    • http://mlonnie@etczone.com coal miner

      Patriot Missle

      You are right.

  • Randy131

    The highest deficit by any President before George Bush II was in the 200 billion dollar range. George Bush II set the record for the highest deficit in his last year in office, of 700 billion dollars. Up to that time all deficits were covered by the US Treasury selling Treasury Bonds to the public and other countries that wanted a safe investment. Since Obama became President his average deficit for every year in office, including projections for his last year in office, has been 1.5 trillion dollars, more than double what Bush II’s record seeting defict was. Since Obama became President and increased the deficits so much, the US Treasury has been unable to sell enough Treasury Bonds to cover Obama’s out-of-control spending spree, so the Federal Reserve Board, through ‘Quantitative Easing’, has bought Teasury Bonds to cover the deficits that the normal auction sales by the US Treasury could not sell, in order to cover Obama’s massive deficits. Since Obama has been President the Federal Reserve Board has bought 61% of all Treasury Bonds sold during Obama’s Presidency, with fiat money, printed out of thin air, with no assets backing it’s value, which has increased the US Dollars in circulation threefold, and is the reason for the high prices of oil and food around the world, caused by an over-abundance of dollars in circulation, which is called inflation. How much longer can the Federal Reserve keep printing fiat dollars to cover Obama’s out-of-control spending before the dollar becomes worthless? Can the US Dollar survive another 4 years of an Obama administration, or the American people for that fact, because when the dollar is worthless, their income or retiremnet savings will be able to buy nothing. Obama refuses to cut back on his spending, and is increasing it by hiring even more federal employees, and blames the deficits on taxes not being high enough on millionaires, but if you taxed millionaires at 100%, it wouldn’t make a dent in Obama’s deficits. What I’m trying to say to you is that Social Security and Medicare don’t have to worry about running out of funds in 20 years, because of Obama’s spending policies, the country won’t exist, as we know it today, in 20 years from now.

    • CJ

      Some of your info needs adjusting. The Demo-crap congress spent the money at the end of the Bush II error. Bush policies, unlike Obama’s were NOT the major contributer to spend. As POTUS, they may not all be responsible for what goes on, but they are accountable. And remember, most of the bonds sold by the treasury were “bought” by the Federal Reserve… a PRIVATE bank that simply made an accounting entry to ‘authorize’ the printing of more money. Inflation is coming.

      • Ted Crawford

        ” Inflation is comming ” Very true! This inflation rate will make Carters 20% seem like a long term goal!

      • Randy131

        CJ, you’re right, Democrats controled both houses of Congress, the US buget, and all law making abilities in that last year of the Bush administration when that record setting deficit was created. During the Bush administration the economy boomed, except of his first 6 months in office, when he had to correct a recession he inherited from Clinton, which the MSM blamed on Bush, and until 11 months after the Democrats won majority control of both houses of Congress, the US budget, and all law making abilities, and caused the recession we’re now still in, to make Bush and the Republicans look bad so they could get their man elected President 12 months later. At the time the Democrats won majority control in both houses of Congress, the US budget, and all law making abilities in 2006, during Bush’s last midterm election, the national debt was 8 trillion dollars, but with 2 years control of Congress, and another 4 years with Obama as President, the national debt will reach over 16 trillion dollars, according to all projections. In just 6 years, with Democrats in control of both houses of Congress and Obama as President, the Democrats have doubled the national debt, that took all the other Presidents and Congresses 230 years to reach. But the point I was trying to make that you commented on was Obama has more than doubled the largest ever deficit prior to him becoming President, each and every year he has been President, and those deficits are so large that the US Treasury can’t sell enough Treasury Bonds to cover them, so the Federal Reserve Board has to print-up more money just to cover Obama’s out-of-control spending, which will destroy the US Dollar, American’s income and retirement savings, through out-of-control inflation, which has now just started during a recession that Obama and the Democrats claim we’re no longer in.

  • Bert Cundle Sr.

    Can’t Servive if the politicans don’t quit useing it as their personal sluch fund & Pork Barrel!
    Pay the fund what it is owed! ( Common sense is abused, by Politicans.)

  • DavidL

    Just get Republicans and Democrats to return the money they stole from Social Security over the years to pretend their budgets were in better shape than they were. Problem solved!

  • RebelYell687

    Nice article, Sam, now tell the truth about Social Security. What truth? Try this: first, having and using a Social Security Number/particpation in Social Security is 100% voluntary and not required to live OR WORK in the United States, so saith the Social Security Administration. Write them and ask, email or snail mail, they will admit that IN WRITING. Second … most people are forced into SSN use wherever they go via banks, insurance companies, dentists, doctors, cell phone companies, brokerages, hospitals, utility companies, cable TV companies, employers, etc. In each case, THERE IS NO LAW, just the policy of the requestor, usually based upon ignorance and fear. Third … use an SSN on the job, and you incur liability not only for FICA, but also payroll tax, Medicare tax, federal income tax, state income tax, local income tax, and Obamacare mandates/penalties. No SSN use, no liability incurred for any of those items. Lookup the words liability and incur in a dictionary if you must. Get ahold of this concept … I repeat … it is your “voluntary” use of an SSN on the job that incurs your tax liabilities … no SSN use, no tax liabilities, no withholding. The IRS admits that form W-4 is VOLUNTARY. Fourth … no SSN, it isn’t “employment” but merely working for a living. Fifth … THERE NEVER EVER WAS A TRUST FUND. So saith the govt. to the US Supreme Court in 1936 when the Social Security Act was challenged in court. Sixth … any benefit paid out to a recepient is, legally speaking, just a welfare payment of sorts. How much it is or isn’t is totally at the whim of Congress. Congress could require mandatory piss tests for drugs as a requirement for receiving a Social Security handout.

    Stop paying for your own enslavement. Now is an excellent time to drop out of the system.

    Pete

    • Andy

      And, pray tell, how does one go about getting off of the S.S. bandwagon? I have a job and, as far as I know, you cannot hold a job w/o a SSN. Enlighten me, please.

  • http://www.facebook.com/ron.golden2 Ron Golden

    I am retired and have been since my 62 birthday which was in 2010 since I was born in 1948. I served in the Navy During the Vietnam war and at that time everyone was issued a service number and after my active duty I joined the Naval Reserve and somewhere along the line the assigned service number was replaced by the member’s SSN and they are the same (interchangeable) and not sure why. So now every military service member goes by their SSN for all ID purposes.
    My wife because physically handicapped and in the meantine I lost my job due to corporate downsizing and the 401K that I had invested in for many years. The way it was invested I lost over $60K in the fund and that was late in 2008 and my job was gone very early in 2009 before Obama was even installed into office. I can’t blame Obama on my job loss, but I had put in over 40 resumes to companies throughout my local area. Because of my wife’s handicap needs it was a godsend in a way to allow me to take care of her and I collected U/E benefits up till the time that I was eligible to collect SSI benefits. Thank god between my Military Retirement benefits along with SSI my wife and I are surviving with no frills. I paid in all those years and like all the rest of the people collecting such as myself that are considered “baby boomers” I expect that my benefits should be provided as long as I am on this Earth.
    Thank you.

    • danrshaw

      Changes to ID cards, which are free, will contain two Department of Defense-issued ID numbers — one a general ID number and the other to be used for claiming and verifying benefits. The social security number is still contained in the bar code but will also be relaced in phase two of the change. Retired members can have their ID cards updated at any time. Active members must wait till their card expires.

  • Gary

    If the morons in both parties would agree to cut foreign aid by 75% and get America out of the UN, close its doors and sell the buildings, SS & Medical could be paid for 50 years.

    • old hillbilly

      AMEN!!!

  • linda

    take awat the president pay and put into ss and some of the other big shots money to and we would have enough why do we pay them all so much , they just screws .

    • http://www.facebook.com/tess.comments Tess Comments

      Limit Government Pensions.
      Make sure thos who receive pensions are VESTED. Serving one term in office should not give anyone a life-time Government pension. One Government Pension per individual.

  • Steve E

    Let’s just keep printing more money to finance ourselves and see what happens. There will be inflation just like we are having now, but just like now, people don’t realize it. Just get the MSM to keep saying there is no inflation, and many people will believe it. Just like they believe it now.

  • http://www.facebook.com/tess.comments Tess Comments

    It is time to put more restrictions on how SS is handed out. Plus there needs to be FOLLOW-UP on all disability cases.
    What are some of the reasons someone can collect SS? TOO many. Originally is was set up as a retirement Supplement.
    How many people are receiving SS disability benefits mainly because they did not take care of their own health? How many children are receiving SS benefits because one of their partents are in JAIL? etc.

  • Mel

    Irregardless of what the TRUE inflation rate is we will be told it is 2-3%. If you buy groceries you know inflation is high. Cripes it cost as much to go to McDonalds as it does to go to Bob Evans for supper. Best advice? learn to cook and hoard cigarettes. Cigarettes can be bartered where dollars are refused. ( no I don’t smoke)

    • Steve E

      Let’s do the fuzzy math: A gallon of milk last year was $3 a gallon. Today it is $4 a gallon. 1 divided by 3 = 33%, no. it’s 2%. Because 33% now equals 2% under the new fuzzy math.

  • Chuck

    One big factor at present is that many older people who normally would still be working and paying into SS have lost their jobs and are collecting from SS. Get rid of Obama and grow the economy and some – maybe a lot – of people on SS will leave it and get a job. Cutting bad regulations, starting with drilling restrictions – will open a lot of jobs.
    This isn’t the complete solution – it will just lessen the SS deficit.

  • DH

    Chuck is right on target. How can you make a plausible projection when your projection is predicated on calculations based upon the current economy.

    • old hillbilly

      1) You must assume a fixed salary, tax rates, ROI, payment, benefits, values, and conditions

      2) test inflation factors by CPI comparisons to fixed points in time. back in time fixed base vs any or all future points is inflation current point index fixed vs any prior index time is devaluation

      3) apply ROI to inflation change factor to calculate fund interest additions
      purchasing power is date aquired & inflation is applied thereafter, as inflation drives up costs and wages over time…. periods of measurement activity must be consistent, etc, etc. doesn’t have to be exact because the looting of social security mind numbingly huge!

  • old hillbilly

    Run an annuity calculation using 15.3% SSI-MED, 46 yr pay in (18-65bd.), 13 yr benefit to 78 eol. dump in a salary to calculate monthly deposits and a ROI… and blow your mind. 0.1% ROI will yield more payback than current benefits up to around $40K and everything beyond goes to the black hole.

    46 yr inflation was close to 5% compounded. @ $40K wage, one worker would generate $1.1 million @ 65… more than enough to provide benefits for several $40K retiring workers, and everything beyond to $106K wages goes in rat holes. Would you loan-invest $ for less than 5%… pay credit card debt, student loans, auto, home?

    Go to the CPI index back 46 years & up to 2011… what was inflation and how much did your SSI fund purchasing power drop Imagine inflation adjusted benefits, but not principle…

    Think zero FED rates, world bankers playing in the pot, obama, geitner, bernanke, and all of the other rats traipsing through the corn crib,,,. Taking corn and leaving rat pellet IOU & been here’s?

    Can you see “unfunded debt” tattooed on your rear end instead of “my little SSI trust fund works for me” Could it be in the hundreds of trillions or more?

    What is treason? Do we even care or are we satisfied debating drivel from the most evil people on the planet

    Your test is due tomorrow AM – no shows fail!

  • catman11

    Workers need jobs here.

  • Sam

    Dimocrats had control of congress from 2006-2010 see what happened? Don’t blame Bush.

  • http://comcast nitewalker22

    #1 bush was left in the green, with the debt,by clinton #2 if we stop fighting over sea’s and take care of people at home, and all the vet’s fought for our freedom ,we would not have all these problems . no matter who’s the pres. we are in for long hall, and i don’t obama for this ,look what he walk in too.

  • dmsyz

    FOCUS: Government tells us it takes 2.6 workers to provide one benefit that is less than ½ wages, that appears capped below $40,000 wage levels! If government invested the funds @ 5%, 1 worker provides roughly 6 retiree benefits while higher wage workers @$106,800 deposit enough to pay roughly up to 15 retirees @ $1667/mo each to age 78. The minute you wander away from this reality, you are deceived, in the bag, and hopelessly victimized! Any less return on investment is fraud, theft – Armageddon! Fight or perish! FOCUS!!!

    Instead of investing funds at reasonable secure capital rates, government prints a zero interest IOU paper and spends earned currency certificates on consumption or gives it away, causing inflation that .that reduces the purchasing power of the unsecured paper certificates by around 5% compounded over the last working lifetime! One can go on and on about what the vermin are doing & have been doing, but save it for the prosecutors! Lose focus & the bad guys will finish de-developing this country into another Cuba!

    Once upon a time we had some morality and ambition. Today, people can’t get past the detail and spin to understand what is really happening! Without God’s faith and truth you’re on a leash. Trust in men and you’ll be where we are right now – aimless and losing it all, by our own hand.

Bottom
close[X]

Sign Up For Personal Liberty Digest™!

PL Badge

Welcome to PersonalLiberty.com,
America's #1 Source for Libertarian News!

To join our group of freedom-loving individuals and to get alerts as well as late-breaking conservative news from Personal Liberty Digest™...

Privacy PolicyYou can opt out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.