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home | Social Security/Medicare

Social Security and Medicare: The Twin Disasters That Will "Break the Bank"

Gary North

Here, you get an overview of the looming bankruptcy of the Social Security/Medicare system. Politically, they are one program, which Congress is unwilling to challenge.

Begin here:

The unfunded liability of the two programs is now about $222 trillion. This is the estimate of Prof. Lawrence Kotlikoff of Boston University. This deficit is present value, not future value. It is what the federal government needs today to invest in the private sector in order to generate enough revenue to pay off the obligations.

To pay for Social Security and Medicare, the government would have to raise income taxes by 81%.

By 2005, the year I started this website, the combined programs of Social Security, Medicare, and Medicaid consumed almost 50% of the U.S. government's budget. For a report on this, click here.

USA Today ran a front-page story on November 15, 2005 on the looming crisis. This was two years before the recession of 2008-9 hit, which created huge federal on-budget deficits of over $1 trillion a year, 2009-2012.

For evidence of how Congress siphons off the trust fund money, refuses to count this massive borrowing as part of the official budget deficit, and then spends the money, read this. It is posted on Social Security's website.

Since the assets in the Social Security trust funds consists [incorrect grammar -- consist] of Treasury securities, this means that the taxes collected under the Social Security payroll tax are in effect being lent to the federal government to be expended for whatever present purposes the government requires. In this indirect sense, one could say that the Social Security trust funds are being spent for non-Social Security purposes.

For a summary article on this accounting trick, go here: Empty Trust Fund

There is no statistical escape from bankruptcy or default, either open or through inflation, yet Congress pretends that this is not inevitable. Why? Because voters will remove from office any Congressman who tells the truth about what is statistically irreversible. The question today is the form that the bankruptcy will take: outright default, mass inflation, or a salami-slicing reduction of benefits.

Grand Illusion: Social Security Is a Government Insurance Program
Gary North - December 11, 2013
I received a letter from a "conservative" who says Social Security is an insurance program. He is wrong, according to the Supreme Court. . . . keep reading
Interview with Prof. Lawrence Kotlikoff on the Unfunded Liabilities of Uncle Sam
Gary North - December 06, 2013
Here, he lays it out. . . . keep reading
What Is the Best Age to Start Collecting Social Security?
Gary North - October 26, 2013
Age 62? Age 66? Age 70? Before you decide, ask another question. . . . keep reading
Stiffing the Geezers: A Rejected Manuscript
Gary North - October 22, 2013
Back in 2005, an author asked me to write an article for his next book. His editor rejected it. See what you think. . . . keep reading
Social Security and Medicare: Twin Disasters Loved by All Age Groups
Gary North - August 19, 2013
The voters can get rid of these two systems at any time. They don't. Why not? Because they like the systems. . . . keep reading
Social Security's Slickest Defender: "First, Ignore Medicare."
Gary North - June 20, 2013
Social Security's slickest defender is short on solutions and long on rhetoric. . . . keep reading
The Crucial Medicare Statistic That Hardly Anyone Knows About, Which Is Hidden in Plain Sight
Gary North - January 17, 2013
How much money does the government spend each year on every Medicare member? Do you see why this statistic is important? . . . keep reading
Yes, Virginia, Social Security Really Is Going Bankrupt.
Gary North
The Trustees say it's going bankrupt. Why are there defenders of the system who insist that it isn't> . . . keep reading
Social Security and the Federal Reserve: Is S.S. Getting Murdered?
Gary North
Zero Hedge argues that the FED's low interest rate policy is destroying Social Security. Is this true? If so, what happens next? . . . keep reading
Short Video: Why the U.S. Government Will Default on Its Debt
Gary North
In just over 6 minutes, a retired accountant lays it out, using the government's own figures. Voters do not see it coming. It's coming anyway. . . . keep reading
Means-Testing Your Social Security Payments
Gary North
Will you collect at all? Don't count on it. . . . keep reading
The Social Security/Medicare Trust Fund Is a Pile of IOUs from the U.S. Government. The Pile Is Shrinking.
Gary North
There are no marketable assets in the Trust Fund. There is nothing except IOUs from the government. . . . keep reading
Retirement Armageddon: The Video Seminar
Gary North
In this 90-minute seminar, I go through the looming bankruptcy of Social Security in 2010, and Medicare's existing bankruptcy. Then I discuss ways to evade the effects. . . . keep reading
A Moving Federal Chart that Illuminates the Future of Social Security and Medicare
Gary North
Nowhere do we read the words, "Social Security." We do not have to. . . . keep reading
Accounts Overdrawn: The Bankruptcy of the Social Security/Medicare System
Gary North
This is an introduction to my detailed report, available only to members of thius site, Stiffing the Geezers. This covers the basics. The detailed evidence is in my special report. . . . keep reading
A Clergyman's Security
Rev. Francis Mahaffy
This classic warning against joining Social Security was written by Rev. Mahaffy in 1957. It was a warning to ministers, who were being allowed to join the program. Today, ministers can opt out for moral reasons in the first year of their ordination. They should. . . . keep reading
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