“Suddenly”, Social Security Is In Trouble
Turbo Tax Tim Geithner tells us:
Social Security’s annual surpluses of tax income over expenditures are expected to fall sharply this year and to stay about constant in 2010 because of the economic recession, and to rise only briefly before declining and turning to cash flow deficits beginning in 2016 that grow as the baby boom generation retires.
Of course what Geithner and the Democrats want you to believe is this sudden problem with both Social Security and Medicare has been brought on by the recession and, of course, that means it’s Bush’s fault.
But I took the opportunity to hit the QandO archives and found a couple of interesting live blogs Dale did. The first was the State of the Union address from February 3, 2005.
Thirteen years from now, in 2018, social Security will be paying out more than it takes in. And every year, the annual shortfall will get larger…By 2042 the system will be bankrupt.
That line, of course, was met by Democratic jeers.
A couple of months later at one of his rare news conferences, Bush again emphasized the point and adjusted the dates. As Dale live blogged it:
—Social Security will start spending more than it take in 2013. By 2040, it’ll be bankrupt. Like, you know, it’s not bankrupt now, really.
Again, that was met by Democratic jeers. That’s because Bush mentioned private accounts. Incredibly, much to the horror of many on the right, he also mentioned means testing. But still, the Dems were more interested in blowing off the impending crisis as fiction than addressing it.
The same story was told the next year with the same results.
Our boy Harry Reid in May of ’06:
In a statement released Monday, Senate Minority Leader Harry Reid (D-Nev.) said the trustees’ report “confirms that, despite White House scare tactics, Social Security remains sound for decades to come.”
According to Reid, “The real threat to Social Security comes from Republicans, most of whom support and voted for privatizing Social Security.”
As it turns out Medicare/Medicaid is in much worse shape than Social Security, and deserves some discussion as well – but the Social Security question is instructive. This isn’t some ‘sudden’ problem brought on by the recession. This is one that was identified years ago and ignored by the very same people who are now trying to lay blame elsewhere. Just something to remember when they stand in front of the microphones, look directly into the cameras and lie through their teeth.
~McQ
Nobody I know of ever denied social security was in trouble; I think it’s a bit paranoid to see this as an attempt to say it’s Bush’s fault. What’s undeniable is that the recession has decreased the expected flows into the system and magnified the problem, moving the time frame up of when things get into crisis mode. (Also, I think a lot of people are sure glad this wasn’t privatized!) But it’s not Bush’s fault, Geithner was simply noting the situation — again, one made worse by the recession. Note as well that the baby boomers will start withdrawing from 401K plans and the like soon instead of paying into them, which also bodes poorly for stocks.
“Nobody I know of ever denied social security was in trouble;”
LOL. Dude, the entire dem/lib blogs/MSM told us everything was fine and that Bush was going to take SS away from old people because he was a mean Republican.
I was quote disappointed that the GOP majority couldn’t find the balls to pass it anyways, but the Dems scared them off. Now its a dem thing, so watch the “solutions” fly off the shelves.
Paul Krugman (Nobel prize for economics) writing in November 2007:
Hey Scott – I think you ‘know’ of a guy named Harry Reid. As Bruce put in his post -
“In a statement released Monday, Senate Minority Leader Harry Reid (D-Nev.) said the trustees’ report “confirms that, despite White House scare tactics, Social Security remains sound for decades to come.”
Oh, I see, Social Security isn’t in trouble (as long as a Republican is President….)
Oh wait, but now it is in MORE trouble (when it wasn’t in trouble at all) because of the recession.
Uh huh, I get it.
And of course it WON’T be blamed on George Bush, who personally, single handedly, by himself, all alone, CAUSED THE RECESSION, which our Messiah inherited. Oh dear.
“moving the time frame up of when things get into crisis mode” wow!
Ah, I get it, DECADES to come.
Scott, it looks like the guys you’re optimistic about thought they had DECADES and now you’re buying into the idea that this recession has ‘moved the time frame up of when things get into crisis mode”.
I detect a disconnect that will perhaps work to our mutual advantage – I have many fine bridges Scott, and much land directly east of Eastport Maine, much fine fine land, you would like to purchase these properties perhaps?
“Nobody I know of…”
*snicker*
Tell me, oh wise one, where will all that money go when we boomers cash in our 401ks? My mattress is too lumpy already.
We shall see how this is spun. I have no doubt that the trash will follow their normal procedures and blame Bush, safe in the knowledge that MiniTru will conveniently forget that Bush warned several times that this would happen and even tried to do something about it.
O’ course, if MiniTru DOES remind us of Bush’s failed efforts, it will doubtless be in the vein, “Bush (snarl!) wanted to PRIVATIZE your Social Security, so you’d be BANKRUPT because his failed economic policies caused the stock market to crash.”
Yep, we’re MUCH better off leaving our retirement in the capable hands of Uncle Sugar. / sarc
Just curious. When does it stop being “kick the can down the road” and become “failing to address a serious problem”? Is that time now? If it is, what happens to all of Obama’s grandiose plans while Social Security and Medicare are addressed?
Rick
what happens to all of Obama’s grandiose plans while Social Security and Medicare are addressed?
Why Captain O calls down to the engine room, more spending, more spending. Throw more debt in the hopper, we need to get the SS United States Economy up to full steam.
This is just a bunch of bovine excrement. People act as if the finances of SS actually matter, as if these trust fund “assets” actually refer to anything real.
You want to make this clear? Ask the people worried about what happens in 2016 a simple question:
If the US government increased payroll tax revenues by $500B per year, while simultaneously reducing income tax revenues by $500B per year, causing the Trust Fund holdings to increase greatly, would you feel any better about Social Security or the financial situation of the US Government?
I posted about this here, but as with most things, I think there’s a willful action to avoid speaking about this issue honestly, so I doubt it’ll do any good.
We should have commercials up from here until November 2010 showing how the Dems blocked every reform of entitlements from 2005 on. Show Bush trying to do something, and keep asking the American people: “the Dems said no then, and now we are in a crisis. Say no to them in 2010.”
Nevada is sinking into a morass because of the Dems. Why should Reid not be vulnerable next year? Is there any Republican who can take him on? We really need to defeat Reid most of all. It can be done, although it is rare: in 2004, Tom Daschle, the Majority Leader, was defeated for reelection. How about two Dem leaders going down in one decade?
We should have commercials up from here until November 2010 showing how the Dems blocked every reform of entitlements from 2005 on.
While that would be quite excellent, I don’t see that happening anytime soon, because what is needed to mount this sort of offense is a nice, sturdy spine, something that seems to be lacking in Republican quarters as of late…
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As it stands now, Social Security becomes insolvent on 2016, not 2040 or 2037 or whatever date down the line they’ve come up with. The problem is the SS trust fund. It consists of special treasury bonds.
Guess who is on the hook for those bonds? The same people on the hook for the rest of the government’s debt. The taxpayer.
And how well is the government doing on that front? Even with the SS surplus it hasn’t balanced its books in years. The budget balancing problem is getting horrifically worse, not better. So come 2016 when SS needs to tap those treasury bonds they’ll be tapping a source already drowning in debt.
I was reading 25 years ago that social security would be broke around about now. Time flies! Oh, well, it was fun while it lasted.