The Coming Social Security Fiscal Disaster

Readers of this blog know that we have little respect or trust in our politicians abilities to take the right and effective actions to protect the best interests of the American people. Most times the major problems of our times are left unresolved by Washington and in those few instances when the Washington political class take action to try an issue, e.g. Obama Care, they fail miserably, usually leaving the issue in worse shape than before they tried to fix it.

And this lack of ability, lack of brains, or lack of willpower to actually fix and issue and improve the lives of Americans is not restricted to one President, one Presidency, one political party or one session of Congress. This inability to fix anything goes on for decades even though the issues and suffering caused by those issues is known to anyone with a lick of sense:

• Medicare - hurtling towards fiscal insolvency.
• Medicaid - hurtling towards fiscal insolvency.
• Social Security - hurtling towards fiscal insolvency.
• National Infrastructure - dams, roads, bridges, etc. falling apart.
• Education - we still continue to grossly under educate our kids vs. the rest of the world.
• National Security - our borders leak like a sieve which allows criminals and potential terrorists to relatively easy get into the country.
• Voting Processes - our voting processes out out of date, corrupt, and open to massive voter fraud possibilities and realities.
• National Energy Strategy - we have none which requires us to continue to stick our nose into Middle Eastern affairs.
• National Debt - over $20 trillion and growing every day, threatening the very existence of our economy and democracy.

The list goes on and on and like we said before, no politician of set of politicians has shown the ability or guts to actually tackle these tough issues.

How bad our some of these issues? Let’s focus on Social Security today, using a recent article from the February, 2018 by Veronique De Rugy as the basis for the discussion:

• As we have discussed many times before in this blog, the Social Security process today is currently in, and has been in for a number of years, a negative cash flow situation.
• In other words, for every dollar that Social Security collects in taxes today, it pays out more in benefits than that dollar it collects, relying on raiding general Treasury funds to make up that shortfall.
• There is no realistic economic forecast that can show Social Security ever getting back into a positive cash flow situation under the current rules and tenets since more and more Americans will be entering their Social Security years than those that will be dying off and leaving the system (although, many times people never leave the system and the Social Security Administration continues to pay out taxpayer wealth to dead people.)
• Another of the main reasons why Social Security is in such bad shape is that back in the late 1960s during the Johnson administration, the Washington political class decided to to move Social Security designated funds into the general budget, replacing those funds with worthless Treasury IOUs, thus creating the bogus and false named “Social Security Trust Fund.”
• These IOUs are, in theory and reality, worthless pieces of paper since the wealth associated with the Social Security tax revenues has been spent and squandered by every politician since the Johnson administration.
• All they represent is that the Federal government will take current tax revenues to continue to prop up the negative cash flow Social Security process under the guise of paying back those worthless IOUs, i.e. there is no “trust fund” of wealth.
• Which means that our kids and grandkids at some point in their working lives will have to be taxed longer and harder just to fulfill the promises Social Security has made to older Americans, mostly due to the fact that politicians over the years have taken Social Security funds and spent it and wasted it on non-Social Security efforts.
• The Reason article points out that as a result, over the next 80 years, the Social Security process will have a deficit equal to about $44 TRILLION.
• A trillion dollars is a lot of money when you realize since the beginning of our country, well over 200 years, the Federal government has run up a deficit of “only” $20 trillion.
• From a theoretical basis, every man, woman, and child in the country would have to write a check for over $135,000 to help pay off this deficit which obviously is not going to happen.
• Which means that a lot of people are going to see greatly reduced Social Security benefits in the future or a lot of Americans are going to pay a lot more in Social Security taxes in the future or both.
• And the longer we wait, the worse the higher taxes and lower benefit hit it is going to be.
• All because Washington politicians in the 1960s got greedy and stripped the Social Security process of all its wealth starting then and going forward and because every politician since then did not have the guts and brains to put the whole process on a fiscally sound basis, resulting in now an unheard of and crippling $44 TRILLION deficit in the coming years.

Back in 2009 in our book, Love My Country, Loathe My Government,” we proposed three tweaks to the Social Security process that would have greatly improved the process and reduced the risk and deficit size:

1. Raise the retirement age for those people that could afford to forego their Social Security checks for a few years.
2. Eliminate Social Security payments to wealthy Americans who could afford to live without a monthly Social Security check in order to save limited funds for Americans who really needed Social Security to live, e.g. Warren Buffett Donald Trump, Bill Gates, Barack Obama, etc. would have their relatively measly Social Security checks withheld for the greater good.
3. Reduce the Social Security tax rate but raise the Social Security income cap to more fairly spread out the tax burden.

If Obama had been a true leader and had gotten these three steps through Congress, we would not be talking about a $44 TRILLION deficit today. But alas, like every other politician in Washington, he did nothing and things have just gotten worse. 

And it does not look at the age of Trump will get much better. Rather than fixing real problems like Social Security, Washington politicians today seem obsessed with the small stuff, the deckchairs on the Titanic. Which gets us to another one of our recommendations to fix America from our book: term limits. Given that many, many sitting politicians have been sitting in those same seats for decades without resolving a single major problem, how much worse could it get if enacted term limits to eject people from Congress after a limited time? How much worse could it get?

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w