Just A Reminder: The Social Security Trust Fund Has Been In Deficit Since 2010

Ssi_card

According to a new report from the Social Security trustees, the behemoth entitlement program’s trust fund will run a negative balance some time in 2035, but that’s a bit misleading.

First, the program’s obligations are more than the program’s tax collections, meaning that the entire program is running in the red. This means that in order to pay out benefits, the Social Security administrators must dip into the trust fund. As I’ve already mentioned, that’s projected to last until 2035, but there’s another wrinkle.

The trust fund itself is just US Treasury bonds. Every time Social Security dips into the trust fund, the US Treasury must make good on some of those bonds. To do that, they have to borrow money, adding to the national debt.

As the gap between Social Security revenues collected and Social Security benefits paid grows, the program will become a larger burden on the nation’s budget.

If nothing is done by 2035, and the trust fund runs out of treasury bonds to cash in (which may be a moot point as I think our national budget will have collapsed by then if we’re still on our present spending trajectory), this would mean that Social Security could only pay out benefits based on current revenues. That would mean massive benefit reductions.

What can be done to fix it? We could force Americans to pay more for Social Security by raising payroll taxes (it should be noted that Obama’s payroll tax is making all of this worse by taking money away from the program), or we could ensure they get less from the program by raising the retirement age.

But those solutions would only kick the can down the road. They are temporary solutions. Future generations would still find themselves where we are now.

The only real solution is to means-test Social Security, so that it becomes more of a safety net program as opposed to a universal pension, or to eliminate the program entirely.

Unfortunately, in today’s political climate, if you mention reforming Social Security you get accused of wanting to throw old people off of cliffs.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • http://nofreelunch.areavoices.com/ Kevin Flanagan

    When are they going to stop calling it an insurance program and admit they have always lied about it?

  • Bat One

    Thank you, Lyndon Baines Johnson!

  • SigFan

    I would be willing to make this compromise.  I’ll forget all about the money they’ve extorted from me during my career for their Ponzi Scheme – and in return they forget all about taxing what I’ve invested personally for my retirement.  Straight up trade – come and get it!

  • $8194357

    When FDR sold it, those in the know knew where it would lead…

    LBJ? Perhaps just one of the middle men from the beginning of the lie until it reached maturity…

    Intended-unintended marxist economic deconstruction of a free market capitalist society…..

  • John Q. Public

    Please remove the photo of my Social Security Card. A-holes…

    • dwnwiththeolguard

       Bwahahaha, that is hilarious!

    • mickey_moussaoui

      funny

  • Spartacus

    Can’t be Bushes fault, he left office in 2009. It must be the fault of that fiscally responsible guy that took over after him. What is his name? Oh yeah, Odrama…

  • sbark

    Social Security………..we knows its not “insurance”,,,,,,, it cant be an investment  with the kind of returns it gives with no downside risks involved…….

    using average figures for a couple retired in 1960, your total Social Security and Medicare taxes paid were $18,000 (in constant, 2011 dollars). Total benefits received were $248,000 – a return of 1,277%.

    therefore the only thing it can possible be is simple generational theft…………

    If our children were taught what this is doing to them in “pubic education” and could vote…….SS wouldve been gone decades ago………

    but alas they are being dumbed down in school, pre occupied with ipads, xboxs and tv  to get mad about it……………and the OWS just wants their share before society breaks down .

  • mickey_moussaoui

    It’s all part of the Democrat plan to cripple America so they can replace our government with a dictatorship

  • Gern Blanston

    Why is raising the age of eligibility only ‘kicking the can down the raod’? It would both lessen the burden on the system while increasing roles of those paying into the system. How about starting SOMEWHERE? Raise the age of early eligibility – do something and build on it over time (but not too much time…).

    Sosh-Security (why can’t politicians pronounce the word social?) was originally designed for folks who had outlived the average lifetime of most Americans – at a time when those folks were the poorest age group in America. Now the oldest Americans are the most finaincially secure; and we allow payments to begin over 15 years BEFORE the average life expectancy is reached. Gee, I wonder why it is in financial trouble? 

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