It has been contended that Social Security is going bankrupt. This year is going to be a mark in favor of that viewpoint. The Social Security Administration is going to spend more than it takes in. It isn’t the first time, either. The SSA was subject of a lot of turmoil in the 1980s. There is a trust fund that Social Security puts the extra cash into, which is how they’ll cover the loss.
Social Security income to be exceeded by spending
According to the Los Angeles Times, the Social Security Administration will spend more than it will earn this year. The board of trustees for Social Security and Medicare have reported, as of Aug. 5, that the tax income will be less than is due to pay out by the end of 2010. The health care reform bill will purportedly streamline Medicare, and it’s expected to stay solvent until 2029. Estimates before the bill passed gave Medicare until 2017. More incentives and regulations are expected to stave off Medicare’s impending demise.
Social Security is a trust fund baby
The Social Security Administration keeps a trust fund in case of these instances. Anything left over after expenditures gets put in the trust fund. In case of a shortfall, that’s what the fund is there for. That’s why it was created. The Social Security Trust Fund is projected to run out by 2037, according to the New York Times. The Social Security commissioner, Michael Astrue, says according to the numbers the Social Security Administration will still be able to meet at least 75 percent of their obligations.
Too many Paul’s and too few Peters
Tax revenues are how Social Security is funded. If fewer people work, less money comes into the equation. As people live longer, more has to be paid out. The Social Security deficit won’t affect benefits this time.
More information on this topic
New York Times: http://www.nytimes.com/2010/08/06/us/politics/06benefits.html
LA Times: http://www.latimes.com/news/nationworld/nation/wire/sc-dc-0806-social-security-20100805,0,6306255.story
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