TRUTH IN POLITICS

The Loss of Social Security
Many economists say that at the present rate of expenditures within our Social Security System, the amount paid into it each year, and the amount borrowed and never paid back by our legislature there will be nothing left by the year 2037. In an article by U S News and World Report, with the losses of 401Ks, losses of value on homes, and vanishing jobs, more than 50 million Americans who were assured last year that one of their assets would still be there, which was their Social Security Check. Now they are being told that it will no longer be there in 27 more years if something is not done to take it out of jeopardy.
Elderly citizen’s safety net is eroding fast and has been projected to deplete itself for many years now. It is well known that with the legions of baby boomers hitting the rolls of retirement will some day deplete the funds of the surplus funds of Social Security and the recession has just shortened this time. Deductions for Social Security from payroll, along with taxes which is the key source of funds for Social Security have declined since during the beginning of the recession and this has shortened the time when there will be more money going out of the system than is being taken in.
Further exacerbating the problem the time for its depletion may be shortened further by government dipping into it to the 2.4 trillion dollar fund by the government and never paying these loans back into the system. After the depletion of the fund the government will only be able to pay about ¾ of its promised benefits through the year of 2083 and this can only be done by increasing the amount of Social Security taxes withheld from paychecks.

Crisis is Not Here Quite Yet
Although the depletion is alarming, the non-partisan National Academy of Social Insurance that the ledgers on Social Security should not cause us to panic just yet because at present “there is no crisis at this point, but only a deficit in long term financing of the system.”
The real crisis that happened in 1983 cause a panic because the system was so depleted that Social Security benefits would have had to have been decreased or delayed within a few months if Congress hadn’t acted swiftly at that time. But it is certain that Social Security is in trouble and needs attention. The longer it is put off, the more problems it will have later on and the more it will take to repair it.
When your vehicle develops a problem, you don’t wait for it to stop running before going to a mechanic to find out how to fix it, because it will only cost more in the long run. We can hear the knock in the engine and know we are having problems developing so now is the time to fix it.
Fixing the Social Security is not going to be easy, or the past two presidents would have gotten it done. The beneficiaries of Social Security takes in a large block of voters who aren’t too friendly about two ways needed to bring the system back into balance (cutting benefits or raising taxes) and this why our last two Presidents hesitated to tackle the job.
With the problems plaguing the Obama administration, the recession and loss of jobs is creating too many problems to do anything about bringing Social Security back into balance, and with the cutting of money from both Social Security and Medicare to cover costs of the new Obama Health Care bill it is causing the majority of voters to balk and rise up against it.
The largest mistake with the system was when it was transferred into the General Fund where it could be drawn upon as borrowed money for other projects. This would be acceptable if it was paid back, but to date, none of these loans have been replaced in the fund, which further exacerbates the problem. The simplest solution seems to be taking Social Security out of the General Fund, increasing the withholding by a small increment and making it impossible for it to be used for anything but paying for the commitment to the beneficiaries. This will probably not happen because the legislature does not want to lose the funding for the many pork barrel projects they want to fund.

Long Term Options
The conservatives are more amenable to cuts, while the liberals are more in favor of increased deductions from pay to cover the losses to Social Security. It will probably end up being a combination of both. Any changes however will probably be made at a snails pace and will be quick fixes.
Congress has already raised the retirement age to 67 in 1983 and now it about to be raised even higher, taking into consideration that the beneficiary has a 401k to supplement their Social Security. This supplement is just another way of passing the increase in deduction to the consumer without making it seem that is what is being done. This plan is still being worked out in Congress and may be introduce on the floor in the near future.
When all is said and done, the beneficiaries will probably be looking at increased withholding, cuts in benefits and Medicare as well, increased age for retirement to 75, and required supplemental such as 401k that will become mandatory. There is no clear path in sight at the present, and all the lawmakers seem to shy away from it as much as they can, but something definitely must be done soon or the system will implode.
No one wants increases in deductions, nor cuts in benefits, but the truth is that something has to be done soon or many people who will still be counting on this income after their retirement will be in a world of hurt. Some place along the line some generation will have to bite the bullet if Social Security is to continue. But no matter what is done, Social Security needs to stand alone on its own, outside the grasping hands of Congress or anyone else in the government.