The U.S. is nearly a deadbeat nation and few politicians care
Posted By RichC on January 23, 2024
It’s called the third rail of politics, and in those areas of spending where politicians with the best of intentions dare to talk, nothing gets done. Only a few have suggested finding a solution to our ballooning debt and yearly deficits … or two of the primary drivers: Social Security and Medicare. These programs continue to drain the yearly Federal budget and drive our borrowing to ridiculously high levels, which will likely to only get worse if politicians on both sides of the aisle refuse to “face the music” — oh, finally a new idiom!
Few in Congress have even been able to talk about a way to “manage” Social Security and Medicare going forward without being blasted … or at least chastised enough to keep their mouths close on the subject in front of cameras. BUT everyone knows that without reform or an influx of new revenue, these entitlements will not be sustainable in the future — perhaps as soon as 2031. Yet we continues to the charade that it will somehow solve itself … or if you are a politician, just pass the problem unsolved and much larger to the next bunch of politicians.
Millions depend on Social Security, Medicare
Benefits paid out by the program have exceeded money coming in since 2021, and the trust fund is now expected to be depleted by 2033. That’s a year earlier than forecast last year, thanks in part to slower economic growth.
Unless changes are made before then to shore up the program, 66 million Social Security recipients would see their benefits cut by 23-25%.
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The primary challenge for Social Security is demographic. As aging baby boomers retire, there are fewer workers paying into the program to support the rising cost of benefits. As of last year, there were just 2.7 workers paying into the system for each person drawing Social Security benefits.
Additionally, a smaller fraction of income is now subject to the payroll taxes that support Social Security.
Patching the program will require higher taxes, lower benefits or some combination of the two.
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