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Friday, August 22, 2014

While The Titanic’s Orchestra Plays On: CBO Says Social Security Deficit Has Increased 4X Since 2008

On July 15 the Congressional Budget Office rolled out updated projections that show a precipitous decline in Social Security’s solvency. The program’s 75-year deficit has nearly quadrupled since 2008, and the trust fund’s exhaustion date has moved forward by nearly 20 years. Remarkably, the response by progressives is to expand Social Security’s benefits while leaving its multi-trillion-dollar unfunded obligations largely unaddressed.

In 2008 CBO forecast that Social Security faced a 75-year funding shortfall of 1.06% of payroll, which implied that a mere 1.06 percentage point increase in the payroll tax—to 13.46% from the current 12.4%—would keep the system solvent for 75 years. This seemingly minor shortfall caused many on the left—who had fought tooth-and-nail against President Bush’s 2005 efforts to fix Social Security—to mock the very need for reform.

The program’s deficits were small and distant, the argument then went, the trust fund was projected to remain solvent until 2049, and CBO said its estimates were uncertain, which progressives took to mean that insolvency might never happen at all.

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6 comments:

Anonymous said...

Here is what the Fed will do to avert a near term crisis:

1. Raise the debt ceiling - yet again.

2. Issue more (junk) bonds - and then repurchase them - (Ponzi scheme)

3. Curtail entitlements under the auspices of streamlining.

Until one realizes the corrupt system for what it is - our government will never be held accountable to the people.

Anonymous said...

62 or bust.I ain't waiting another day.

Anonymous said...

Once the IOUs are paid back into the "Trust Fund" there will be no deficit

Anonymous said...

Most folks don't know that after a person hits a certain income, there are no SS taxes paid. The income level now is around $115,000.

All they have to do is remove this "cap". That solves the solvency issue.

Anonymous said...

12:57
If they take your advice, then the billionaires will be entitled to $10,000 per month SS checks when they retire.

They capped the payments when they capped the payouts.

Get it?

Anonymous said...

I would gladly walk away from 20 years of contributions in the system, if I could keep my future earnings out of the trust fund and invest them myself.