Thursday, March 25, 2010

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....

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.
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.

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