And there’s plenty more where that came from.
This year, Social Security and Medicare are paying out more to their beneficiaries than they are collecting from FICA. The long-predicted shortfall has begun. It’s not off in some hazy future anymore, it’s starting right now.
Present value figures for the total shortfall over time are estimated between $40 trillion (yes, that’s “trillion” with a “T”) and $72 trillion. That’s 40-72 trillion over and above what what the law is already set to take from productive workers over the next few decades that’s been promised to current and future retirees.
Remember how Bush’s deficits were going to destroy the economy, according to some people? Better hope to God they’re wrong, because that’s chicken feed compared to this, although the extra spending it represents doesn’t exactly help matters.
(And Bush’s drug benefit program, which is characterized as “inadequate” by our friends on the left, contributes to the problem to the tune of $8 trillion to $12 trillion)
It would be nice if those “Rock the Vote” guys would point to these figures, especially the ones that mention a 32 percent FICA rate (over and above income taxes, which will have to be raised at some point to cover present non-Social Security and non-Medicare spending), and explain that their elders can take this kind of money from the younger generations because they vote in such huge numbers, and because younger people don’t. That should boost turnout among the intended victims more than lame attempts to use celebrities and rocks stars to paint voting as “cool”, whatever that means.
(Thanks to 101-280 for that second link, and Catallarchy.net for the first).
One hates to contemplate it, but isn’t the classic answer of governments to these economic problems (Ken has examined in this post and his previous post) an inflation of the currency?
Watertreat,
Inflating the currency just functions like a hidden tax. It is probably a more destructive form of taxation but doesn’t really solve the problem.
Inflation lets you reduce debt but it won’t help offset social welfare spending as many countries proved in the 70’s.
Did I mention that I hate Baby Boomers?
Thanks a lot, Shannon. (You know, we aren’t all alike. Well, maybe.)
I believe Social Security and Medicare already have built in cost-of-living / inflation adjustors.
Ahhh, good ol’ google, behold: The COLA. There are limits to it though, so if inflation is high enough it will get pegged. But those limits really only kick in if Social Security funding is fubared anyway.
Robin Goodfellow,
Are not you he that frights the maidens of the villagery?
Kinda of surprised to find out you have an interest in Cost Of Living Allowances.