This notion shouldn't surprise anyone in the US, but this recent story again highlighted how pressing the issue is.
The important dates are not when the trust funds will be depleted -since they're full of nothing more than government IOUs anyhow- it's the dates that they begin paying out more than they take it that really matter. At that point, it means that the government has to start paying back the money it looted from those trust funds. We were taxed to fund Medicare and Social Security and the government spent it. Now our money is going to have to be used to repay the money already taken from the funds. I, for one, think it's just great that we're paying twice for Social Security benefits we won't likely even receive and even if we do, are a horrible investment anyhow.The trustees, issuing a once-a-year analysis of the government's two biggest benefit programs, said the resources in the Social Security trust fund will be depleted by 2041. The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped out by 2019.
Both those dates were the same as in last year's report. But the trustees warned that financial pressures will begin much sooner when the programs begin paying out more in benefits each year than they collect in payroll taxes. For Medicare, that threshhold is projected to be reached this year and for Social Security it is projected to occur in 2017.
I don't really see a good way out of these programs. Privitization could help, but not solve, the Social Security problem but Medicare looms even larger on the horizon, becoming insolvent next year. I think these entitlements are the real threats to the stability and prosperity of the US.
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