Social Security Hasn’t Improved With Age

A few years ago, I wrote a short blog about the dire condition of social security. Rather than simply tell people it was in bad shape, I cited a few quotes that I’d taken right off of social security’s website. I suggest that you read my first post but here are the quotes again for your review:

"Social Security is not sustainable over the long term at present benefit and tax rates without large infusions of additional revenue. There will be a massive and growing shortfall over the 75-year period."

"People are living longer, the first baby boomers are nearing retirement, and the birth rate is low. The result is that the worker-to-beneficiary ratio has fallen from 16.5-to-1 in 1950 to 3.3-to-1 today. Within 40 years it will be 2-to-1. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates."

"If Social Security is not changed, payroll taxes will have to be increased, the benefits of today's younger workers will have to be cut, or massive transfers from general revenues will be required."

Now, being the responsible blogger that I am, I linked to social security’s website so that people could check my source. Here’s the link I gave Social Security website’s FAQ. You can click on it now if you’d like but don’t bother because the page has been taken down. Why was it taken down? Could it be because in the three years since I wrote that, social security has been rescued? Hardly! More likely it’s because the truth was a little too dire.

It took a little digging but I found this Board of Trustees’ announcement that was just published last month. Here are some quotes from that announcement (bold added for emphasis):

The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2036, one year sooner than projected last year. The DI Trust Fund, while unchanged from last year, will be exhausted in 2018 and legislative action will be needed soon. At a minimum, a reallocation of the payroll tax rate between OASI and DI would be necessary, as was done in 1994. The Trustees also project that OASDI program costs will exceed non-interest income in 2011 and will remain higher throughout the remainder of the 75-year period.

The point at which non-interest income fell below program costs was 2010. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.

Over the 75-year period, the Trust Funds would require additional revenue equivalent to $6.5 trillion in present value dollars to pay all scheduled benefits.

“The current Trustees Report again reflects what we have long known to be true -- we need changes to ensure the long-term solvency of Social Security and to restore younger workers' confidence in the program,” said Michael J. Astrue, Commissioner of Social Security.

There it is again, folks. Anyone who denies it is simply whistling past the graveyard. If you don’t believe me, just click on the link and read the report for yourself. Do it quickly though – I can’t guarantee how long it will be there this time.