Scathing New Report Sends Alarm On Social Security

Social Security

Last week, a group of analysts published an astonishing report about the future of Social Security in the United States, and their remarks were nothing short of damning.

According to their calculations, for example, these analysts claim that Social Security is already running a huge deficit to the tune of tens of billions of dollars each year.

In fact, this Social Security funding deficit has been taking place for several years now, and it’s actually accelerating. So the problem worsens each year.

According to the analysis, the astounding rise in Social Security recipients vastly outpaces any growth in tax revenue received into the program. And this trend will continue for decades.

The report goes on to describe Social Security’s two main trust funds, OASI (for ‘Old Age Survivors Insurance’) and DI (‘Disability Insurance’).

They tell us that DI actually went bust several months ago.

But rather than attack the root cause of the problem and restructure the program, Congress quietly slapped a band-aid on DI by simply diverting funds from OASI, just enough for DI to limp along for a few more years.

So in other words, they robbed from OASI to pay DI, and keep it afloat through the next presidential election. It’s incredibly short-sighted.

Among the other programs slammed in this report, the Hospital Insurance (HI) fund, one of Medicare’s major trust funds, is of particular concern.

Their brutal analysis shows HI is going to completely run out of money in 2028, just twelve years from now (when President Clinton finishes her third term).

2028 is actually two years earlier than they had originally projected.

And they project the entire Social Security program will be fully depleted six years later in 2034.

Like I said, this report is incredibly damning.

But it raises an important question– just who are these crazy, fringe analysts predicting all of this doom and gloom?

After all, the political establishment has been telling everyone for years that Social Security is going to be just fine. And they seem to have a solid grip on the situation, right?

Well, the report was actually published by the Social Security Administration itself, signed by (among other cabinet officials) the Treasury Secretary of the United States of America.

It’s absolutely incredible. The government is publishing this data in black and white.

They’re telling anyone who’s willing to listen that Social Security has dug itself into an impossible hole.

More importantly, they’re telling us there’s a 0% chance that the government will be able to honor its existing commitments.

They’ll either have to radically raise taxes, or simply reduce (or eliminate) the Social Security benefits that they’ve been promising taxpayers for decades.

The younger you are, the steeper the price you’ll pay.

If you’re in your 60s, for example, you may likely see your benefits cut. If you’re in your 40s or 50s, you can count on it.

And if you’re in your 30s or younger, you can not only forget about Social Security, but you can expect to pay more and more taxes to bail out a program that won’t be there for you when it comes time for you to collect.

This is what happens when nations go bankrupt.

History is full of so many examples of dominant powers who think their wealth will last forever… and so they make far too many promises to far too many people for far too many years.

But eventually the reality of simple arithmetic catches up.

(As we discussed yesterday, arithmetic is slowly dying off in the Land of the Free, so perhaps this explains a thing or two).

We’re seeing this now in the US, and we’ll continue to see this problem worsen in the coming years until it becomes a full-blown emergency and people cry out, “Why didn’t anyone see this coming?!?”

Here’s the good news: you have ample time to prepare, and there are plenty of solutions to fix this.

Don’t get me wrong– I don’t mean “fix Social Security”. Oh no. That program is toast.

I’m talking about fixing this for yourself.

Retirement is one of those life events that is completely predictable. We know it’s going to happen.

And with a little bit of education, planning, discipline, and execution, we can vastly influence the outcome and prevent any major catastrophe from interfering with our goals.

You can dramatically boost your own nest egg, for example, and have much greater say over your retirement assets by setting up a structure like a solo 401(k) or a self-directed IRA.

(When structured properly, you can contribute potentially north of $50,000 per year to your retirement.)

It also makes sense to invest in your financial education; learning more about investing will clearly be beneficial in boosting your returns, and this can have a profound effect over time.

Especially if you’re younger, increasing your average return by just 1% over the course of 20-40 years can add up to hundreds of thousands of dollars in additional retirement savings.

You may also want to consider retiring abroad where you can live the lifestyle you’ve always wanted at a fraction of the price, and substantially stretch the time and value of your retirement savings.

Look, I’m convinced that Social Security will become a national emergency some day. Just remember that since its demise is conspicuously predictable, the impact on your life is completely preventable.

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About the Author

Sovereign Man
Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

1 Comment on "Scathing New Report Sends Alarm On Social Security"

  1. The U.S. Government owes S.S. $2.6+TRILLION —- backed by “The FULL Faith and Credit” of the government ………. HOLD that thought.

    Social Security is the Private PROPERTY of the Workers that PAID for it.
    Social Security is a TONTINE, a TRUST FUND.. American workers pay into it their entire lives through payroll deductions. Social Security payments are supposed to come from that fund. So why is Social Security needing an increase in the debt ceiling? Where did our money go? Of course, this is a rhetorical question. Starting with the Clinton administration, the government “borrowed” the cash in the Social Security Trust Fund, replacing is with Treasury Bonds that the US Government is now unable to redeem. The implications are obvious. Because the US Government cannot redeem those Treasury Bonds in the Social Security Trust Fund, the US Government is already in default against the American workers. The American workers’ money is gone. The US Government has effectively embezzled the retirement money of American workers. So, in borrowing money to replace the looted cash, the US Government is expecting future workers to pay for Social Security benefits that were already paid for once before, effectively double-billing We The People. To put it another way, the US Government just sold us an apple, but is forcing us to pay for two, and trying to look like this is wise fiscal management of the peoples’ retirement funds!
    China and every other country should BEWARE …… the American Government is a DEADBEAT.
    The American Government DOES NOT PAY IT’S DEBTS.
    Loan America money, you will NEVER get paid back.

    “Full credit” of the Government. The credit rating of the U.S.
    Government was recently downgraded from triple-AAA by S&P. This
    means that the credit rating of the U.S. Government is deteriorating. It
    is actually deteriorating quite rapidly. In fact, if it weren’t for the
    fact that the U.S. Government – unlike the individual countries of the
    EU – has the ability to print money in unlimited quantities, the actual
    credit rating of the U.S. Government would be “CCC-,” which means that
    it is on the cusp of default. So when you keep your wealth in the form
    of U.S. dollar “cash,” on a de facto basis you are storing your “wealth”
    in an “investment” that is on the verge of bankruptcy.

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