home | Social Security and Medicare: The Tw . . .

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.

Wising Up: 51% of Public Think Social Security Is Doomed
Gary North - August 15, 2015
Only 49% to go. Be patient. keep reading

Medicare: The Tip of the Iceberg. We're on the Titanic.
Gary North - April 25, 2015
You need to read this article. Need to. Had better. Topic: Medicare. It discusses several looming problems. The red ink has bar keep reading

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

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

More Headlines More Headlines