Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

A Dangerous Moment for Social Security

Politics / Social Issues Jan 27, 2016 - 06:03 PM GMT

By: Casey_Research

Politics

By Justin Spittler

Social Security funds are drying up…will there be any money left when you retire?

Social Security is America’s largest federal program. In 2015, it paid out $870 billion to more than 59 million Americans.

Most Americans see Social Security as a retirement savings program. During your working life, you pay 6.2% of every paycheck to Social Security. In return, the government sends you a check every month after you retire.


However, unlike a retirement plan like a 401(k), the money you pay into Social Security doesn’t land in your own personal account. Instead, it goes into one big pot called the “Social Security Trust Fund.”

The Social Security program pays retirees from this pot. As long as enough money flows into the pot, the program works, and retired people get the payments they expect.

•  Last year, the Social Security Trust Fund lost money…

On Wednesday, Investor’s Business Daily reported (emphasis ours):

The Social Security Trust Fund just suffered its first annual decline since Congress shored up the retirement program in 1983.

The unexpected $3 billion decline is an indication of the precarious state of Social Security's finances. Since 2010, the program has been paying out more in benefits than it gets in tax revenue.

In 1955, there were 8.6 workers paying into Social Security for every one person receiving Social Security. Today, due to America’s aging population, there are just 2.8 workers for every recipient. And that number will decline as the “baby boomer” generation continues to retire.

The Congressional Budget Office (CBO) expects Social Security to go broke within 13 years, according to Investor’s Business Daily.

Social Security's cash shortfall is expected to rapidly escalate from $74 billion a year to $361 billion in 2025 alone, the Congressional Budget Office projects. Under current policies, the CBO says the trust fund will be gone by 2029.

•  To fix Social Security, the government would need to cut benefits by 29%...

According to Investor’s Business Daily, this would bring the program’s costs in line with how much money it takes in.

The average retiree receives $1,355 each month from Social Security. A 29% cut would reduce that to $962 per month.

That’s not going to happen. Because senior citizens are a huge voting bloc, most politicians consider Social Security benefits to be untouchable.

•  The U.S. government will continue to make promises it can’t keep…

To keep the scheme going, Washington will run bigger deficits. It will go deeper into debt.

Longtime readers know the U.S. government is drowning in debt. The federal government already owes more than $18 trillion. That’s 129% more than it owed a decade ago.

The federal debt is now bigger than the yearly output of the entire U.S. economy. The current debt-to-GDP ratio is 101%, the highest since World War II.

Programs like Social Security helped cause this financial wreck. Today, $0.72 of every dollar the government spends goes to entitlement programs like Social Security. In 1970, only $0.28 of every dollar went to entitlement programs.

•  Casey Research founder Doug Casey says Social Security is a “gigantic Ponzi scheme.”

He says it’s “nothing but a vague promise backed by nothing but an impossibly debt-ridden government with financial problems that are about to get much worse.”

Here’s Doug.

By taking almost 15% of a person's wages right off the top, Social Security makes it much harder for a poor person to save money. Worse yet, it makes people think they don't need to save for themselves; it gives them a false sense of security. Even worse is that the money never really belongs to the presumed recipient; it's simply another unsecured obligation of a bankrupt government.

Doug says millions of Americans who expect Social Security income won’t get it. He believes the Social Security program should be eradicated.

•  We don’t expect the government to fix Social Security...

If you’re under the age of 50, you’ll probably never get a dime in Social Security payments.

However, we doubt Social Security will go away quietly. The government will likely try to “fix” it the only way it knows how: by printing and borrowing money.

As we mentioned earlier, the U.S. government is already drowning in debt. Printing and borrowing billions more to fix Social Security could wreck the economy. Or worse, it could destroy the U.S. dollar.

If you keep a significant portion of your money in assets tied to the U.S. dollar, we recommend watching this free video. It contains all of Casey Research’s best advice on how to protect your money from a U.S. dollar collapse. Click here to watch.

Chart of the Day

The Social Security Trust Fund lost money last year…

Today’s chart shows the Social Security Trust Fund’s annual cash flows. As you can see, the fund took in more money than it paid out every year from 1984–2014.

However, in 2015, the fund handed out $3 billion more than it received. It was the fund’s first deficit since 1983.

Unless the government reforms Social Security, the Congressional Budget Office says the fund will run out of money by 2029.

The article A Dangerous Moment for Social Security was originally published at caseyresearch.com.
Casey Research Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules