Last month the Social Security and Medicare Boards of Trustees projected that the theoretical combined OASDI trust funds will be depleted in 2034 (see table below). OASI is Old Age and Survivors Insurance and DI is Social Security Disability Insurance. Others components are Medicare Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) [1].
According to the projection, even after depletion, continuing tax income would be sufficient to pay 79% of benefits in 2034 and 74% in 2090. Though I do not expect to ring in 2090 and may not even see 2034, many of you will see both!
The textbook further notes: “ . . . the government is somehow going to have to come up with the funds to make good on its pile of IOUs to the Social Security trust fund.”
Allen W. Smith, Ph.D. (Ball State and IU grad) stated that “The government has embezzled all surplus Social Security revenue, generated by the 1983 payroll tax hike, and spent the money on wars and other government programs. None of the money was saved or invested in anything.” [2].
The U.S. Department of the Treasury[3] reports that at the end of calendar year 2015 our national debt was more than $18.9 trillion dollars ($18,922,179,009,420). As of June 30th, 2016 it has grown by nearly ½ billion dollars ($459,412,131,371) to about $19.4 trillion ($19,381,591,140,792).
U.S. Census Bureau estimates that our population is 321,418,820 [4] so our national debt represents $60,300 for every man, woman and child in America (about $143,791 per household). Without even touching the principal, the interest expense alone is $215.44 every month, for every household.
With $19 trillion in debt and no budget at all – let alone a balanced one - it is unrealistic to believe that our federal politicians will hold themselves accountable for unsustainable promises made decades ago by their predecessors. After all, to be elected and remain in office they’ve made quite a few of their own.
Rely on nothing from government.
| KEY DATES FOR THE TRUST FUNDS | ||||
OASI
|
DI
|
OASDI
|
HI
|
|
First year cost exceeds income excluding interesta
|
2010
|
2019
|
2010
|
2015
|
First year cost exceeds total incomea
|
2022
|
2019
|
2020
|
2021
|
Year
trust funds are depleted
|
2035
|
2023
|
2034
|
2028
|
[2] Source: Allen W. Smith <http://www.fedsmith.com/2013/05/23/government-owes-2-7-trillion-to-social-security> accessed 12/10/2014.
[3] Source: U.S. Department of the Treasury, Bureau of the Fiscal Service <http://www.treasurydirect.gov/NP/debt/current> accessed 07/24/2016.
[4] Source: U.S. Census Bureau <http://www.census.gov/quickfacts> accessed 07/24/2016.
