XML FeedsThe growing Social Security problem
By P Alfonso on Jan 5, 2010 | In 1. The Nation | Send feedback »
Between Tiger Woods and the ridiculous underwear bomber story you must have captured the headlines of a shoot out in Las Vegas. Apparently, a disgruntled retiree felt that the system had cheated him out of Social Security compensation. According to the reports, he had just lost a law suit against the Federal Government for cuts in payments to his Social Security benefits.
As they say, “You ain’t seen nothing yet”. We know that our government is running on an almost two trillion dollar yearly deficit. We also know that lenders for our debt are saying “no more”. The Treasury can no longer find buyers for long term Bonds. This means that within the next two to five years we will have to buy back the trillions that we are going to borrow in short term Bonds while at the same time borrowing more. In other words, as Bond holders come to collect their $10 we will have to ask them for $20 “good luck”.
The Treasury’s Social Security and Medicare money machine has dried up. They have borrowed trillions from the funds. Such practice has already ended with Medicare as they are now paying more than they are receiving. Does that help understand what the big rush is with rethinking the Health Care system? Even worse yet the Treasury's huge borrowing machine known as Social Security will dry up within the next two or three years and will need to start borrowing money to pay benefits to the recipients. This means that the huge and growing budget deficit that we now have will need even more new lenders. The Treasury will have a huge problem finding money to compensate the increasing number of retirees as the baby boomers retire.
The lack of money to pay for Social Security and Medicare benefits is not the only problem. There are many who logically predict that the practice of quantitative easing by the Federal Reserve will bring about huge inflation or hyper inflation. Where could the Treasury get the money to finance double digit increases in Social Security payment when it is already facing nearly 50% budget deficit.
In summary if this violent reaction from one disgruntled retiree caused this much commotion one can only imagine what will happen when instead of one individual the Fed will face tens of millions of angry retirees. To keep them distracted they will have to come up with something bigger and better than the terrorism hoax. Wait; better yet, why not refer to these angry hard working American retirees as viable domestic terrorists?
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