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Social Security Trust Fund goes cash-flow negative

CBO got this one wrong too

By: Soren Dayton (Diary)  |  March 25th, 2010 at 05:02 PM  | 

RESIZE: AAA

Today the New York Times had a shocking story: this year the Social Security Trust Fund will pay more out in benefits than it takes in in revenue. There are several reasons this is an important story.

First, it is important because it reminds us that our country is on the edge of a fiscal precipice. The baby boomers will begin retiring next year. Indeed, with the recession some have started to retire early. As the story notes, “payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned.”

Congress added to this crisis this week by passing ObamaCare. The left has argued that we can afford this $1 trillion spending program because, with the taxes, it will actually reduce the deficit. That’s what CBO says!

But, and this is the second point, CBO got Social Security wrong. They didn’t see this coming. From NYT:

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Just at the moment that we our entrusting our countries fiscal future on guestimates on the health care bills from CBO, it turns out that they completely failed us on Social Security.

Just something to keep in mind.

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COMMENTS

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  • NeoKong

    It was seized and taken hostage.
    Even the people who passed this law know it’s a ponzi scheme doomed to collapse.

    • Soren Dayton

      You understand my point, I suspect…

      • NeoKong

        I wasn’t barking at you.
        Sorry.

        • conritwng

          was not raised very well

          • Scope

            I believe he was promised a cushy Washington job when he loses re-election. And lose he will.

            Dan Benishek’s campaign set a goal of raising 100 grand yesterday, and they did it.

  • http://www.dcworksforus.com Kenny Solomon

    …….will have no problem whatsoever with imposing a 99.99% tax on all income……. ‘for the good of the nation’s financial future and of course, it would be for the children’.

    The layers of fear-instilling, rage-generating, crap-sandwich making ‘hit-’em-all-right-over-the-head’ purposeful deconstruction of our nation are getting thicker, wider and more solid.

    They want people like us to react with violence…….. and when it’s clear we won’t……. they’ll do it themselves and blame us………. the crisis too good to waste.

  • traversecityconservative

    There is NO “lockbox” for the health care money either. They will raid that as well. Obamacare is a holocaust on Americans.

    • bk

      There used to be all this SS money saved in a lockbox until Bush decided to spend on an illegal war and tax breaks for his rich friends.

  • donnybrooke

    So why did the Democrats push so hard to have Healthcare passed?

    Because now they can control who receives medical treatment, and all those aged, non-productive Social Security recipients who are draining money away from the federal treasury will just have to go, leaving only the healthy, prolific workers who contribute to the good of the state (and bureaucratic pocketbooks!).

    Dammit! There I go again! Another conspiracy theory…

    Don Brooke

    • eastbaylarry

      Why should the good people have to pay for THEIR medical treatments? Or how about those dangerous gun owners? And the very thought of healthcare for them poisonous Fox News opinionators, well, need I go on?

  • oblio

    by an author IIRC named Thoreau (not Henry David) about 15 years ago. He outlined with facts and detailed examples of how all economies who have experimented with this Ponzi scheme have failed. It was scary then, even more so now.

  • garbear

    He warned that social security would soon cross this line. Both Democrats and American public scoffed at him.

  • avgamerican

    The farmers and merchants were taxed to support the gov’t huge give aways of bread and entertainment to the masses. All the productive class folded up their tents and migrated to the cities. The gov’t supported masses grew while the tax paying citizens lessened. This was the first leg which caused the collapse. The second was the weakening of the Roman army. The elites didn’t want to join the legions, so they paid barbarians to defend the empire. Finally the corruption of the ruling class for sake of power led to the collapse of moral leadership. What do we have now. A growing number of demographic voters who see socialist policies as their right. The number of these are beginning to over take the tax paying productive middleclass. The current leadership is cutting the military and clearly does not see national defense as a priority. A corrupt congress willing to sell promises for gov’t benefits in exchange for votes. Tell me that we are not repeating history.

    • Ausonius

      I addressed this topic about two months ago:

      See:

      http://www.redstate.com/ausonius/2010/01/24/leftist-barbarians-and-the-decline-and-fall-of-america/

      History has parallels, but there are many differences, with the main one here being that the average Roman, unlike the Average American, did not vote for the imperial government, did not vote for the emperor or the senators.

      • avgamerican

        We have representatives and senators who have entrenched themselves in power. But the key parallel is the demographic trend. The numbers of voters favoring more gov’t is threatening our democracy. No we are not the Romans but our immoral self indulgent society very much resembles the Romans. The writing is on the wall.

        • novacalif

          In the words of Margaret Thatcher: “The problem with socialism is that you eventually run out of other people’s money!”

  • treeofliberty

    Perhaps you could make that argument for President (in most years) but in off year Congressional elections (let alone state or local elections) voter turnout is pathetic.

    • avgamerican

      We wouldn’t be here today if the numbers of conservatives advocating smaller gov’t increased in greater numbers than those voters in favor of more gov’t since the 1960s. There could be several reasons for this ( radicals infiltrating education, mass legal and illegal immigration) but leftist is becoming more mainstream. That leads to Barack Obama presidents and Nancy Pelosi representatives.

  • judybelle1

    The most important thing is that peple are aware of what is going on and they go to the polls to vogte.

    I am a senior citizen and am very worried.

    This is the most radical administration I have ever seen in my lifetime.

  • ihateliberals

    From its inception SS was a flawed plan. It was also create by Democrats to have control over the people. Johnson then took a bad
    program and made it worse by taking the money out of the investment stream. that is why it is paying out more than it is taking in. Again another Democrat ides from the toilet. No body denies ther needs to be forced investment for SS. But his forced investment should be in a personal account the draws interest and will actually benefit the person making the payments.

  • mutantone

    I for one say take money from the congressional retirement plan to pay for their mess up, sort of a penalty for messing up. And make them take part of this wonderful health care program, if it is so good why did they exclude themselves at least the cost will be spread out to all Americans not just us how can they exclude them selves are they also not bound by the laws that they pass?

    ?The truth is more important than the facts.” – Frank Lloyd Wright
    ?Freedom is never more than one generation away from extinction.? ? Ronald Reagan
    ID 10 T error in the administration

    • Common_Cents