Just as gravity propels the lava from Kilauea inexorably toward the sea, a mountain of public and private debt looms over today’s markets.
Earlier this week, the Boards of Trustees for both U.S. Social Security and Medicare released their latest updates on the “solvency” of the programs. The advisories can be read here:https://www.ssa.gov/oact/TRSUM/index.html
Though it’s common knowledge that these programs are vastly underfunded, the degree to which the pending crisis is accelerating should come as a shock to all Americans.
In their report, the Trustees state that the “Social Security Trust Fund” will be exhausted in 2034. Though this retirement income program is already running on fumes due to simple demographics— and the notion of a “trust fund” is really nothing more than an accounting trick —
The report that it will be insolvent in just fifteen years should come as a cold slap to the face for anyone still clinging to the belief that the funding problems plaguing this income redistribution program can be put off indefinitely. From the report:
“Social Security’s total cost is projected to exceed its total income (including interest) in 2018 for the first time since 1982, and to remain higher throughout the projection period. Social Security ’s cost will be financed with a combination of non-interest income, interest income, and net redemptions of trust fund asset reserves from the General Fund of the Treasury until 2034 when the OASDI reserves will be depleted.”
Even worse was the report from the Trustees of the Medicare program. Sharply rising healthcare costs and the increase in program participation due to aging Baby Boomers led the Trustees to project insolvency as soon as 2026. That’s just eight years from now! Also from the report:
…click on the above link to read the rest of the article…
