Social Security Runs out of Revenue...
... and begins drawing on the general treasury this year. One of the main reasons I opposed the healthcare reform bill was that the thing's adding more oomph to our existing financial powder keg, despite protestations to the contrary:
Every since the early eighties, when the Greenspan commission kicked the can down the road with a combination of tax increases and later retirement ages, analysts have been awaiting the day when the [Social Security] system would finally go into deficit. That date has been sliding around between 2016 and 2020 for some years now, but the suspense is finally over: the system is going into deficit this year....As I've said ever since I started thinking seriously about entitlement spending: anyone my age (or really under the age of 40) planning their retirement around getting anything from Social Security is going to be sadly disappointed.
This is the canary in the coal mine; if Social Security's finances are in trouble, Medicare's will also be looking worse. While I was at the Kauffman Foundation's economics blogger forum last Friday, a show of hand indicated that about 80% of the people there thought America would have a serious fiscal crisis in the next two decades. This is how it starts--not with a bang, but with a moderate decline in revenues.