Oops. Social Security Not Paying For Itself. 6 Years Earlier than Predicted. Government Misunderestimated. Again. What a Huge Surprise.

Social Security Promo Poster, 1936 - 1937.

Social Security is no longer taking in more or the same than it's paying out.  This is an interesting development.  You see, we all knew the day would come, but it's now come 6 years earlier than expected.  So for all those politicians who in the past have felt they can just kick the can to the next bunch of elected officials, well, time to pay the piper.  I personally wonder if the politicians have felt no urgency to this matter as they don't pay into this system and are not part of it.  I'm a GenX-er.  I don't believe for one second that I'll see my SS.  But this is only because since I was small, my Mom told me that I shouldn't expect to ever see it, so be responsible for my own retirement money.  Shrewd Boomer, that one.  Anyway, my peers all feel the same way.  But the ones who will truly suffer from this aren't my generation, it's the boomers now retiring.  I think of the policiticans who have screwed and mismanaged and essentially taken the $ poured into the SSI funds and replaced these monies with IOUs, and the little old ladies who are widows, my parents and grandparents... they rely on this income because they were told that they'd have this and this is their retirement.  Now whether it is smart or not, the government made it clear that there would be this funding for retirement for people.  And when it's not there, it's a damn crime.  It's worse than that.  It's a conscious, intentional, evil deed.

Yes it may be legal, but it's W R O N G.  Not all things that are bad or wrong are illegal.

So now the day has come 6 years early (due to the unemployment I imagine, gee who could have seen that coming) where the amount being paid into the system is less than the amount being pulled out.  Time to crack open those drawers and cash some of those IOUs.

You know, I was thinking... if the government just took the running-head-start healthcare taxes and used that money to pay for social security and swapped the SSI IOUs (Those IOUs are actually Treasury bonds, did you know?)   with the healthcare "funds" we're supposed to accumulate... well, wouldn't that be creative!  Then the black hole of social security would be patched until 2014 when our healthcare is supposed to kick in.  That way, when we need the funds for the healthcare that 70% of the population opposed in its current format, well~  Social Security will still be broke (broker than it is now) and that healthcare funding we need will not be there.  So instead of 1 black hole and national healthcare, we'll have 2 black holes and all our insurance companies out of business.  Hmmmm.  Seems easy to see, so how come our brave leaders who are oh-so-much smarter than the general durr-duhh-populus (as they see us) in those backwoods flyover states can't see it?

Or can they?  I really am beginning to wonder?  How is it actually possible that they don't see this cliff they've steered us?  And now they're whipping the horses so that they'll be unstoppable.   



I am nearly convinced that those people in power who do nothing about social security are complicit in this legalized robbery of the present, past, and future generations' money for their own purposes.  But it really doesn't matter to them because it's not something that can land them in jail.  And since they and their friends and family are financially set for life, what does it matter.  I hope I am wrong, but I cannot come to any other conclusion.  I'm out of ideas.  Our leaders are lacking the common sense and decency of knowing right from wrong, that right and wrong that isn't in a law, but in the hearts and souls of most men and women.  They seem to be missing that inner compass of a moral conscience.  I don't understand it, I can't excuse it, and I see the consequences of electing persons who are put forth as candidates by people who say that "character doesn't matter, it's how well s/he does the job." Nope. Wrong. Those repercussions of that thinking is now quite obvious but the damage is done- our policy has been set by those people who believe that character doesn't matter.     


Meanwhile, back at the ranch... the American People are soiling their collective drawers  because as we all know, as the healthcare IOUs when they are cashed, are simply going to be the equivalent of the printing presses churning out more dollars.  Since the dollars aren't actually there, the Treasury [that is dead broke and running on less than zero with additional deficit every year remember] will simply issue little pieces of paper that provide little old ladies with more funds to put in their banks, or cash to use.  As the social security payments are made, our dollar is devalued as every little payment adds to our deficit and national debt.  Tick Tock....  Just hang on till November folks.  It'll be time to get fresh faces in there.

In the meantime, start planting your victory gardens, this is going to be a bumpy year.

Fool Us Twice, Shame on US! -or- How We've Taught the Washington Weasels That We'll Put up With the Same Shit Over and Over Again.

It is said, that we will get the government we deserve.  And when we don't keep an eye on things, we do indeed get what we deserve.

Well this is the latest reiteration of the great social security scandal... now foisted upon the public in the name of "the common good" in order to "do something" to help all those millions of uninsured people gain access to healthcare.

     "But we have to do SOMETHING!"

Now don't get me wrong: I'm NOT opposed to fixing healthcare.  However, when a car has a flat tire, you don't have to get a new vehicle.  Change the damn tire.  The 2000-page health bill monstrosity proposes a complete overhaul.  And this particular "something" is NOT better than "doing nothing."

Actually read the bill.  It's full of goodies.  Taxes starting 3 years ahead of the 'benefits.'  Hmmm... and it's called "deficit neutral" over the next 10 years even though we will be getting a running start on the costs by starting to pay 3 years early.  How does that work? That means, that after the first 7 years - assuming that the goverment cost estimations are correct- it will be adding to the deficit.  And seriously, really, when has the government been good at managing cost estimates?

I know~ Mail.  The Post Office.  Nope, broke.
What about mortgages and financing?  Fannie. Freddie. Indy.  All broke.
And yes, that unbustable fail-proof institution, the FDIC? Now totally broke too. 
What about auto industry stimulus, cars?  Yeah! Cash 4 Clunkers!  Nope, broke ahead of time and actually helped cause tremendous problems because they didn't pay the participating car dealers in time.
Retirement?  Oh yes.  That was Social Security.  Broke.
Transportation.  Yes. Transportation is easy.  We have Amtrak.  Has never operated except at a loss.
Well.. uh... I know!  The stimulus saving or creating a million plus jobs!  Nope. Did you check out the problems?  Lookie here: Jobs Created or Saved in Districts that Don't Exist (ABC News)

Oh c'mon.  Don't be such a doomer-gloomer. This is healthcare. It's different.

Okay then... let's look at actual examples of how well the government handles medical-related programs.

I know, Mediare.  Oops, nope. It's broke.
Ah, Medicaid.  No, no, broke too.
Ooh, ooh- Veterans Administration Hospital system.  Ever been to a VA hospital?  'nuff said.
Socialized Medicine Experiment at the state level: I present the state of Massachussetts.  Romneycare. 1 year into their grand experiment and already rationing.  Yes, indeed- yet our politicians don't bother to look at all these examples.

Statistically speaking, remember HillaryCare?  Remember what a huge bust that was? Well *this* current proposal is even LESS popular than HillaryCare.  The American public does not want this.  Yet our politicians are charging forward.  Well, except for Joe Lieberman (Yay Joe!) who is standing firm on his "NO."

Damn.  That pesky math again!

Goverment healthcare, mathematically speaking, is a self-draining system.  Again, that pesky math.  When it is "free" people will "drive it like a rental."  And there's no cost control built in because people have no accountability and very limited control over their medical decisions.  It simply isn't going to work.  Additionally, think of all the additioal layers of administration and internal systems involved in this entire process... how can we "save" money when we have added 30+ boards and oversight committees and all the employees, infrastructure, administration, and operating costs associated with these?  Think of government forms.  Paperwork.  Seriously- follow this down the road just a bit.

It simply doesn't make sense.

Percentage profit in the healthcare industry:  3.4 %.  That's it.  Really.

"Overall, the profit margin for health insurance companies was a modest 3.4 percent over the past year, according to data provided by Morningstar. That ranks 87th out of 215 industries and slightly above the median of 2.2 percent. By this measure, the most profitable industry over the past year has been beverages, with a 25.9 percent profit margin." 

[source: US News & World Report, "Why Health Insurers Make Lousy Villians" Aug 25, 2009, Rick Newman]  

And you actually believe that the govermnent is capable of running MORE efficiently than private industry?  Remember, even if the goverment adds a 3.5% overhead, (aka: 3.5% less efficient than private industry) we see increases in costs.   Think of the efficiency at the DMV.  The Department of Transportation.  Amtrak.  Any government agency and how these institutions are the model of efficiency, precision, customer service, accountability, and initiative.

The math doesn't work.  Government cannot, has never, and will not operate more efficiently than private industry.  This is why this healthcare bill will cause prices to go up. 

Government doesn't answer to a board of directors or earnings-per-share committees, stockholders.  Therefore, they don't make the smart business decisions that are made in the private industry.  They don't have to.  And so they don't.  

And when the costs go up, either quality goes down or taxes go up to compensate.  Probably both.      

America to Washington: We Have a Social Security Problem.

Social Security. The Boomers are collecting. The Gen X-ers have been told it won't be there. The Gen Y-ers haven't even thought that far out... they are the voting block that never knew of the dangers of Communism. The USSR fell before they were even born. Think about it.

The generation caught between Boomer and Gen X is going to get pinched. Hard. Real hard. They are relying on the SSTF (Social Security Trust Fund) on being there for them. The Boomers were raised by those who lived thru the Great (first) Depression and they knew that one needed to plan for oneself, not rely on others, handouts, or the government to take care of them.

So now we're all vaguely aware of the fact that there are more people drawing out of Social Security than paying in. Basically there are going to be 4 people being paid for every 1 paying in. Mathematically, this doesn't work for long. But that's okay because we have been "saving" in that account for a long long time, right? Wrong. There is no actual "account" that holds all the funds that should have been set aside. That "account" in the sky is full of government IOUs and a little money in there. Kind of like what California is issuing instead of tax refunds now. It's all funny money.

So as I'm seeing now that our declining payrolls and rising unemployment is causing the SSTF (ADD moment: SSTF is not to be confused with SHTF though in this case it's a pretty close synonym!) to be seriously lacking on incoming funds to keep things going. Of course it is! That makes sense. When people are unemployed, they don't pay into the Social Security system. So, as the jobless rate rises, the Social Security incoming funds plummets.

For the first time, this past August (last month!) the US Treasury borrowed $6 billion due to the cash shortfall in Social Security. (This is done as selling T-Bills on the public market.)

A few snippets from ZeroHedge:

-The 2037 Future Value of the August deficit is -$17b based on a 4% return. What this means is that there will be a very significant revision in the 2037 drop-dead date. Based on current trends the go broke date is closer to 2025.

-This is not just a bad month. The net decline in the Funds assets for June/July/August comes to $7 billion. In 08 that period was in surplus by $5 billion, In 07 it was +$7b and in 06 it was +$13b.

-SS is the mother of all systemic risks. Even the debate on this topic brings risk. It will expose an additional $7 Trillion unfunded liability. Another reason for holders of dollars to worry.

Full article: ZeroHedge Writes about Social Security Busting Years Ahead of Schedule in " SSTF Shocker - $6B August Deficit"

( Bruce Kasting, ZeroHedge.com. Exerpts Retrieved on 9/9/09. Post: 09/08/2009 16:26 -0500)

Quick sumary:
2006 : 13 billion (surpulus) in Social Security Funds
2007 : 7 billion (surplus) in Social Security Funds
2008: 5 billion (surplus) in Social Security Funds
2009: -6 billion (DEFICIT) in Social Security as of August close.

Previously predicted that the SSTF would be 'broke' by 2037. Plenty of time to fix it.
The news above means that it needs to be amended to 'broke' by 2025.

That's okay, still time to get smart but we can keep kicking that can down the road for a bit more.
NO! Fix it now, because as the joblessness continues, it will get closer and closer... that 2037 to 2025 revision happened in 2 years. Remember, job loss continues for 9 months AFTER a real recover starts, according to all economists, folks! Another 1 year of this economic decline and increase in unemployment. I put forth that it will move to 2012-2015 according to my math. Disclaimer: I am not a mathemetician, an actuarial, or a CPA, but I am a thinker. If you have ever looked at how interest rates work, accruals, and amortizations, you will understand what I'm talking about.

If this is still unbelievable to you, just consider this: The government has been wrong wrong wrong on all of its financial predictions for the last 3 years straight. In the past 3 months alone, the fiscal deficit was revised upwards by 2 Trillion that, oops, they messed up.

TWO TRILLION underestimation in 3 months? This administration has only been in place for 9 months total. We still have another 3 months to go in this year. Congress is pooh-pooh-ing the Congressional Budget Office's estimations of the new "Healthcare Bill" as costing another 2 Trillion additional, and they haven't explained a way to fund it. We see them totally eff up Cash For Clunkers... (read just one article about this in the Chicago Tribune. There are thousands out there~) and we believe them?

So do you think that Social Security will be viable until 2037? 2025? 2015? What's your vote?