Combined with the fact that I'm now 61 years of age and closer by the minute to actually collecting Social Security, that makes it very bad news.
And, of course, the feds are quick to blame the current economic crisis -- job losses and a spike in early retirement claims -- for Social Security woes.
The problem, you see, is that Social Security is expected to pay out more in benefits in the next two years than it actually will collect from workers. If that actually happens, it would be the first time since 1980.
The feds expect applications from new claimants to be 23 percent higher in 2010 than they were this year. Why? Because those folks are older than 62, without a job and unlikely to find another job in the foreseeable future. So to get some money flowing into their home coffers, they'll apply for early retirement.
And I don't blame them a bit. If I find myself in that situation, I'll do the same thing. It sure beats starving to death.
But folks not working are also folks not paying into the Social Security Trust Fund at the rate of 15.3 percent -- employees pay 7.65 percent and the employer pays 7.65 percent -- on gross income.
Numbers don't lie -- less money being paid in, while more money is being paid out, represents a whole lot of red ink.
And as I said earlier, the feds are blaming it on the lousy economy.
Well, that's a bunch of
Because there'd be more than enough money sitting in the Social Security Trust Fund waiting to be used by senior citizens if the federal government hadn't borrowed every spare dollar to pay general fund bills for the last 25 years.
What we're talking about for the Social Security Trust Fund alone is somewhere between $2.4 and $4 trillion (depending on which expert is doing the talking), borrowed by the feds since 1985.
The truth of the matter is there is no money sitting in the Social Security Trust Fund account. What is sitting there, however, is a bunch of federal IOUs that are pretty much worthless.
Imagine, for one moment, the value of the Social Security Trust Fund if the $4 trillion that was borrowed had been repaid and then invested with a 3 percent return.
You do the math. The interest alone would be $120 billion a year. Let's just say we'd be sitting pretty.
My government has borrowed more than a trillion dollars (and more to come, perhaps) to bail out banks, insurance companies, auto manufacturers etc. that have lied, cheated or, through incompetence, have put themselves (and a lot of us) on the brink (or beyond the brink) of bankruptcy.
I can't help but wonder why America's own Social Security Trust Fund isn't worthy of equal consideration.
Because I'm telling you, American workers have more than upheld their end of the bargain. They've provided the funding for their own old-age pension plan -- meager though it is -- and now the money is nowhere to be found because our government has spent it.
And what do we hear from the feds? A sorry tune about how the Social Security Trust Fund is headed for an early deficit because of the bad economy.
Sorry, I'm not buying it. And I hope no other baby boomer buys it, either. Yes, the economy is terrible, but that's not the reason the Social Security Trust Fund is sucking air.
The next time the feds want to borrow a few trillion dollars from China to make something whole in this country, I'd suggest they take care of Social Security first.
Once done, then maybe we can talk about fixing something else.
Columns by Larry A. Hicks, Dispatch columnist, run Mondays, Wednesdays and Fridays. E-mail: lhicks@yorkdispatch.com.
Font Resize
