Last year, Social Security and Medicare trustees warned that the programs are going broke. A year later — they’re still going broke.
This shouldn’t come as a shock to anybody. It’s yet another example of the ineptitude of the political class in Washington D.C. And yet people still clamor for these same politicians and bureaucrats to take control over more and more aspects of their lives.
According to the annual Social Security and Medicare trustees report that was released Monday, Social Security will begin dipping into reserves in order to pay out benefits next year and those reserves will run dry in 2035. At that point, the program will no longer be able to pay out full benefits. In other words, Social Security recipients will see their benefits cut.
Analysts project Social Security’s expenses will exceed revenues as early as next year, according to the report. That means the program will have to begin spending money held in its trust fund in order to meet its obligations. While the Social Security administration has dipped into reserves before, analysts project this is now a long-term trend with no sign of reversal.
“Social Security will pay out more than it takes in next year and every year going forward,” Peterson Foundation chief Michael Peterson told reporters. “That’s the definition of unsustainable.”
According to the Social Security Administration, it will only be able to meet about 80 percent of benefits payable once money in the trust fund is spent.
The Social Security program uses payroll taxes paid into the system by current workers and their employers to cover retirees’ benefits. The program generally runs a surplus. The Social Security Administration invests additional revenues into the mythical the trust fund. Interest earned is also reinvested in the fund. Over time, the trust fund has grown to nearly $3 trillion. But once the system starts spending the principle in the trust fund, it will rapidly deplete.
And of course, the money in the trust fund doesn’t actually exist. It is in the form of Treasurys – US government debt. In other words, the federal government owes the trust
You can read the rest of this article at: http://tenthamendmentcenter.com/2019/05/16/newsflash-social-security-and-medicare-still-going-broke/