Lose the cap

The financial conditions of the Social Security and Medicare programs remain challenging. Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative modifications if disruptive consequences for beneficiaries and taxpayers are to be avoided.

...
Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink to about $20 billion for years 2012-2014 as the economy strengthens. After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Through 2022, the annual cash deficits will be made up by redeeming trust fund assets from the General Fund of the Treasury. Because these redemptions will be less than interest earnings, trust fund balances will continue to grow. After 2022, trust fund assets will be redeemed in amounts that exceed interest earnings until trust fund reserves are exhausted in 2036, one year earlier than was projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2085.

You have it there, Mr. Tenac, from the horse's mouth -- the trustees of Social Security and Medicare. This is from a synopsis they prepared, available at

www.ssa.gov/OACT/TRSUM/index.html

What I got out of this report is that Medicare is in worse trouble than Social Security and will need major repairs, such as deep-sixing the current part D big pharma payoff and re-writing that booger from scratch.

Social Security's long-term health turns on the people (voters) firing the current Congress and getting one willing to raise the tax cap slightly when it's necessary, and that turns on the larger issue of getting a Congress willing to fully fund government operations, because you can't write checks for X amount and then collect revenue sufficient to cover 80% of what you're spending without going into debt.

Of course, that works out great if your objective is to sink quickly into deep debt, and then start creeching and crying "Omigod, look at all these goddam debts! We're going to have to make deep cuts in social programs!"

Or you could fund the government to the same tune as you're writing its checks. Ever think about that? Or get rid of a war or two. Ever think of that? Or how about auctioning off the empire?

Apr 11, 2012 -- 7:17PM, catboxer wrote:

The financial conditions of the Social Security and Medicare programs remain challenging. Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative modifications if disruptive consequences for beneficiaries and taxpayers are to be avoided.

...
Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink to about $20 billion for years 2012-2014 as the economy strengthens. After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Through 2022, the annual cash deficits will be made up by redeeming trust fund assets from the General Fund of the Treasury. Because these redemptions will be less than interest earnings, trust fund balances will continue to grow. After 2022, trust fund assets will be redeemed in amounts that exceed interest earnings until trust fund reserves are exhausted in 2036, one year earlier than was projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2085.

You have it there, Mr. Tenac, from the horse's mouth -- the trustees of Social Security and Medicare. This is from a synopsis they prepared, available at

www.ssa.gov/OACT/TRSUM/index.html

What I got out of this report is that Medicare is in worse trouble than Social Security and will need major repairs, such as deep-sixing the current part D big pharma payoff and re-writing that booger from scratch.

Social Security's long-term health turns on the people (voters) firing the current Congress and getting one willing to raise the tax cap slightly when it's necessary, and that turns on the larger issue of getting a Congress willing to fully fund government operations, because you can't write checks for X amount and then collect revenue sufficient to cover 80% of what you're spending without going into debt.

Of course, that works out great if your objective is to sink quickly into deep debt, and then start creeching and crying "Omigod, look at all these goddam debts! We're going to have to make deep cuts in social programs!"

Or you could fund the government to the same tune as you're writing its checks. Ever think about that? Or get rid of a war or two. Ever think of that? Or how about auctioning off the empire?

Cat, I honestly cant find anything about that report to feel like SS/Medicare is anywhere near solvent.

You have govt appointed trustees basing a solvent SS/Med program on insufficient resources while counting on rosey economic senarios (obama has yet to produce a budget without deficits).

Read the entire last paragraph:

After 2022, trust fund assets will be redeemed in amounts that exceed interest earnings until trust fund reserves are exhausted in 2036, one year earlier than was projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2085.

Redeemed assets from where?  The trustees are counting the IOUs now sitting in the trust fund.  The IOUs are backed by nothing.  Air.  But we are going to redeem them how?  Just keep the printing presses rolling?

The trustee report is based on sound accounting, but you are dealing with a liberal federal govt that acts upon anything except generally accepted accounting principles. 

Its kind of like cheating at golf.  You can be a scratch golfer until somenone actually starts recording the score. 

Then everyone knows, and everyone will know this too.

huh?

I did do the numbers, and came to the startling conclusion that we need to cut expenditure and increase revenue.

As I always say, we could start by opting out of a war of choice or two. I expect another defeaning silence in response to that.

Also, too, the Buffett rule.

Apr 11, 2012 -- 10:42PM, catboxer wrote:

huh?

I did do the numbers, and came to the startling conclusion that we need to cut expenditure and increase revenue.

As I always say, we could start by opting out of a war of choice or two. I expect another defeaning silence in response to that.

Also, too, the Buffett rule.

The Buffet rule!?  Pfffffffffffffffffffffft!!!

On its best projection it will give you maybe $50 billion in a given year.

obamacare is already nearly twice the projection as it unfolds.  And it is no where near finished unfolding.  And we are going to go Medicare for everybody and add 40 million people to it?

The acuraries are only giving out what they are given.  Garbage in (literally) garbage out.

obama is keeping his war going.  We needed to be out of there long ago.  Even if we do, you trust this (or any) federal govt to do the right thing and stop spending or pay down some debt?  Ha!