Back in 2010 the Social Security program officially went insolvent, as outflows to beneficiaries for the first time outnumbered inflows from tax revenues. And over the past six years, payouts from the program have required the government to borrow almost a trillion dollars annually just to keep up with its legal mandate.
In fact, according to the recent 2016 Social Security Trustees Report, the fund that used to contain $2.9 trillion in reserves to pay beneficiaries upon retirement now has a deficit of over $6 trillion, and a long-term estimated shortage of $32 trillion.
In 2010, Social Security (OASDI) unofficially went bankrupt. For the first time since the enactment of the SS amendments of 1983, annual outlays for the program exceeded receipts (excluding interest credited to the trust funds). The deficit has grown every year since 2010 and is now up to 8% annually and is projected to be 31% in 2026 and 44% by ’46.
For a little perspective, the program pays more than 60 million beneficiaries (almost 1 in 5 Americans), OASDI (Old Age, Survivors, Disability Insurance) represents 25% of all annual federal spending, and for more than half of these beneficiaries these benefits represent their sole or primary source of income. – Economica Blog
Going forward these numbers are only expected to get worse because the current working population is not only much less than the historic ‘baby boomer’ generation that helped grow the fund over the past 50 years, but their income and wages are also much less, meaning their FICA tax contributions will not even be close to enough to fund the amount of current and soon to be new beneficiaries that will inevitably hasten the demise of the program.
Over the next 13 years, the number of new workers paying into Social Security is expected to increase by only five million while those becoming eligible to receive social security will increase by 22 million. And this will be the straw that will collapse the ponzi scheme completely unless something drastic is done by the next President who comes into office, since the American people cannot rely upon Congress to deal with the problem since it was the legislative body’s greed in stealing from the fund, and in in refusing to address the problems with the program over the past 30 years that are now putting a huge number of Americans on the brink of disaster once their lifeline to retirement fails.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.