The Grim Consequences of Not Reforming Social Security

The Daily Signal | 6/14/2018 | Staff
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Star Parker is a columnist for The Daily Signal and president of the Center for Urban Renewal and Education.

Each year, the trustees of Social Security and Medicare issue their report delivering the news, invariably dismal, about the financial condition of the nation’s two largest entitlement programs.

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This year, in the report just issued, it’s worse than usual.

Last year, the trustees forecast that Social Security and Medicare’s hospital insurance would have to start dipping into their trust funds by 2022 and 2023 in order to finance their obligations. They report now that the situation has deteriorated such that both need to start dipping in this year.

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The hospital insurance trust fund will be depleted by 2026, and Social Security’s trust fund will be depleted by 2034.

In the case of Social Security, in 2034, just 16 years away, if no action is taken now, either benefits must be cut by 21 percent or taxes will need to be raised 31 percent, to meet obligations.

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Analysts have been writing about the grave fiscal problems of Social Security for years. Yet nothing gets done. Why?

Social Security is the largest spending program in the U.S. budget. Ninety percent of Americans 65 and older get Social Security benefits.

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Any government program, once it gets rooted in our culture and Americans start getting benefits, becomes almost impossible to change. President George W. Bush tried to bring fundamental changes to Social Security. He was a Republican president whose party controlled both the Senate and the House. And he still couldn’t get to first base.

Social Security was signed into law in 1935—83 years ago. Although the scope of the program is much, much bigger today, its basic structure is exactly the same as it was then. Benefits of retirees are paid for through the payroll taxes of those currently working.

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