It is difficult to read about Social Security without the author stating that it will go broke in the year 20?? – this is where there is some variability. However, that the Social Security “Trust Fund” has a quite limited life expectancy is not the issue. The Trustees are quite blunt in their assessment. They conclude, “Lawmakers should address the financial challenges facing Social Security and Medicare as soon as possible.”
So what does our illustrious President think we should do? In a speech in Elkhart, Indiana he said, “It’s time we finally made Social Security more generous, and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned.” Say what? From what planet did this man travel to Earth? If one looks at estimates by highly qualified individuals Social Security could be bankrupt in as few as 12 years and face a 33% reduction in benefits. Yet our President wants to increase benefits.
So we have a President that wants to increase benefits and a populace that strongly believes benefits should not be cut. Poll after poll has shown similar results and across a broad political spectrum (see chart). Such results again demonstrate that the left always makes a better political argument than the right – don’t take personal responsibility, we intend to “give you more stuff.”
Progressive/statist/altruists constantly paint the elderly population of the United States as doing “poorly” and facing near destitution. Nothing could be farther from the truth.
The US population of citizens over the age of 65 years now exceeds 46 million individuals. Some, indeed, are poor. But the vast majority are not, particularly when compared to other nations and younger Americans.
When compared to younger Americans the evidence is unambiguous that Americans over the age of 65 years are the richest Americans and, indeed, the richest demographic in the history of the world. When the current generation of seniors passes away and distributes their wealth to their heirs, it will be the largest transfer of wealth in history.
What may be even more instructive is how senior citizens view their own financial situation. The evidence is conclusive: senior citizens consistently opine that they are doing well.
A respected opinion poll from the University of Chicago (the General Social Survey) asks whether people are “satisfied,” “more or less satisfied” or “not at all satisfied” with their financial situation. In every year since 1973, the elderly have been the most satisfied by a wide margin.
Entitlements are the sanctum sanctorum, (or if you prefer the Hebrew over the Latin, the קֹדֶשׁ הַקֳּדָשִׁים) of the Democrat Party. How could a democrat possibly “feel good” about “doing good” if they don’t take money from a young person and give it to an “old” person? For the Democrat Party and our President, in particular, this is the epitome of “fairness” and “wealth-redistribution.”
The Social Security system does exactly that. It takes money from poorer young people and gives it to richer older people, or, if you prefer, hard-working, poorer, younger people and gives it to older, richer people that are retired and playing golf at the Villages.
I love graphs (but, of course, you know that). Here’s a beauty. This shows the number of workers versus pensioners in Spain (don’t get all in a jumble – I’ll explain why we are looking at Spain momentarily). [Source: Social Security: The unsustainable promise, by Mike Shedlock]
With 8 million pensionistas and 23 million trabajadores, Spain’s social safety net is GOING BROKE and dragging the entire nation with it! In 30 short years that differential will be 15.1 million workers and 14.9 million pensioners. How can their system possibly survive if it is ALREADY GOING BROKE? Answer: It cannot!
So, ask you, what does Spain have to do with the mighty United States of America run by the “anointed one,” Barack Hussein Obama. Well, answer I. sadly more than you thought. Can you read a graph? Enjoy!
If we analyze these graphs we learn that the ratio of workers to beneficiaries peaked in 1999 at 2.9 to 1. This ratio fell to 2.4 to 1 by the end of 2012. More important, like Spain, the ratio of workers to beneficiaries will continue to fall rapidly for several more decades as the baby boomer population ages.
OK, say you. That is old news, Dr. Filly, and we have heard you harp on that before. Do you have anything new to add to the conversation? Yes, answer I, but you are going to have a very bad day after the “enlightenment.”
[Directly from the Shedlock article] Tip of the Iceberg
Unfortunately, Social Security is just a tip of the unsustainable payout promises problem. Public union pensions are trillions of dollars underfunded and several cities in California have gone bankrupt over those promises. Detroit went bankrupt for the same reason as did Central Falls, Rhode Island (see Central Falls Set to File Bankruptcy Exit Plan; 50% Pension Reductions, 40% Slash in Police and Fire Budgets Coming Up).
- Philadelphia: 5th Largest City in US is Effectively Bankrupt; Mayor Holds Closed Meeting With Wall Street to Discuss Asset Sales
- Houston: CPAs state Houston is Bankrupt
- LA: Mayor of Los Angeles Says “Bankruptcy is Not an Option” (Of Course It Is)
- New York Cities: Public Pension Ponzi Scheme – New York Cities Borrow From Pension Plan to Make Contributions
- Baltimore: Time for Baltimore to “Pull a Vallejo” and Declare Bankruptcy
- Miami: Miami Commissioner Says Bankruptcy is City’s Best Hope; Chris Christie Says New Jersey Careens Towards Becoming Greece
- Chicago: Chicago’s Mayor Daley Discusses Bankruptcy For City Pensions
- Scranton: Scranton Mayor Slashes All Public Worker Wages to $7.25 per Hour, Including Police, Fire, His Own; City Effectively Bankrupt
- Harrisburg: Pennsylvania State Capital Files for Bankruptcy
- Zombified Cities Roundup: Detroit Becomes Dumping Ground for the Dead; Financial Urgency in Miami; Oakland Pension Time Bomb; How Pensions Crashed Stockton and San Bernardino
My friends, it matters not what Barack Hussein Obama thinks is “meet and just.” The game is over and “the entitlement society” has lost. It is time to throw dirt on the grave. Prepare yourselves. Have an alternate plan.