Now, U.S. Government Says Your Social Security and Medicare Will Run Out of Money Sooner
By Nilus Mattive May 01, 2012 – In February, I explained why the Middle Class Tax relief and Job Creation Act of 2010 simply compounded Social Security’s big-picture problems. And now just two months later the program’s Trustees have released their latest annual report. The conclusion in a nutshell? Surprise, surprise: “The Social Security outlook has worsened significantly relative to last year’s report.” Let me elaborate on that a bit … Last year the Trustees were saying the program’s trust funds would run out in 2036, causing a 25 percent reduction in payments from that point forward. Now the number in the 2012 report is predicting exhaustion three years sooner than that — which continues the pattern of consistently walking down these estimates year after year. That’s partly because the underlying math is problematic due to long-term forces and false assumptions — including life expectancies, demographics, and the fact that the Trustees are now calling for lower wage growth going forward. But again, it’s also because lawmakers are making things worse not better! Just look at revenues going into the program: In 2011, inflows were $148 billion less than outflows and administrative costs, with $103 billion of that attributable to the aforementioned payroll tax cut … And for 2012, the Trustees see an even bigger annual shortfall of $165 billion … with $112 billion of that from the extension...
Read More