The predictions of dire financial consequences have actually been widely publicized in the mainstream. In July 2014, for example, The Hill reported on an analysis by the Congressional Budget Office that Congress’ and the White House’s inability to control or reform entitlement spending – considered to be politically radioactive by members of both parties – is collapsing the budget.
The Hill reported further:
The CBO said the rising costs of entitlement programs like Medicare and Social Security as the U.S. population continues to age are the drivers of U.S. debt.
“Debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely,” the CBO report said.
Unbelievable honesty – for a change
And in August 2015, Reuters reported that the current trajectory of entitlement spending – boosted in large part by taxpayer-supported health insurance subsidies mandated under Obamacare – is simply unsustainable:
[T]he brighter near-term picture does not change the CBO’s longstanding view that the still-growing federal debt is unsustainable. The CBO forecast that public debt would grow from about 74 percent of gross domestic product now to about 77 percent in 2025.
One of the most costly of federal entitlement programs is Social Security. Begun in 1935 during the Great Depression – signed then by a liberal Democrat, Franklin D. Roosevelt – it was passed over the objections of fiscally conservative politicians who were keenly aware of the law’s long-term financial implications for future generations, Simon Black noted in a piece for SovereignMan.com.
Ironically, when he signed the measure into law, Roosevelt said Social Security would serve “as a protection to future administrations of the Government against the necessity of going deeply into debt to furnish relief to the needy,” Black wrote.
Except Social Security, like Obamacare, delivered exactly the opposite of what was promised (do you see a pattern here?).
Officially, the U.S. government is operating business as usual; unofficially, however – and realistically – the federal government is broke. It is nearly $19 trillion in debt – $9 trillion more than when Barack Obama took office – and there is no indication that there is enough political will on Capitol Hill to make the necessary changes in law to a) keep Social Security solvent; and, thus, b) keep America solvent.
At present, various Social Security trust funds hold about $2.7 trillion in assets but, as Black notes, the government’s own estimates show about $40 trillion in liabilities. What’s more, Social Security’s second-largest trust fund, the Disability Insurance fund, is set to go broke in a matter of weeks.
“The trustees who manage these massive funds on behalf of the current and future retirees of America are clearly concerned,” Black noted.
Tens of millions of Americans haven’t saved anything for retirement
As reported by Black, the 2015 report of the Social Security and Medicare Board of Trustees plainly states:
“Social Security as a whole as well as Medicare cannot sustain projected long-run program costs…”, and that the government should be “giving the public adequate time to prepare.”
That is about as clear as it gets: There won’t be enough money in the future to cover the government’s promises of benefits, period. It doesn’t get more plain.
And yet, we are always hearing politicians say, “Social Security is just fine and will continue to be.” So are these trustees just political hacks or outright wackos?
Neither, it turns out. One of the trustees is the Treasury Secretary, Jacob Lew. Others include Labor Secretary Thomas E. Perez, Health and Human Services Secretary Sylvia Burwell, and others. They are the ones who sign their names to the reports saying that Social Security is going broke and that the government should be giving Americans time to prepare.
And Americans should be preparing, because, as the U.S. Government Accountability Office said recently in a report, tens of millions of Americans have not saved a red cent for their retirement.
Can you say “collapse of the civil society”?