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 $84 trillion. See the table, based on a 2007 estimate -- before the recession -- made by Prof. Kent Smetters of the Wharton School of Finance at the University of Pennsylvania. Click here.
To pay for Social Security and Medicare, the government would have to raise income taxes by 81%.
Today, the combined programs of Social Security, Medicare, and Medicaid consume almost 50% of the U.S. government's budget. For a report on this, click here.
If you are willing to view a balanced, brief presentation using about 30 simple graphs to describe that is inevitably going to happen, click here.
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 benefits.
USA Today ran a front-page story on November 15, 2005 on the looming crisis. The Comptroller General of the United States -- who monitors the government's financial books -- says the situation is "worse than advertised."
In 1955, the Social Security program was known by Congress to be statistically unsound. Nothing was done then to repair it, any more than anything will be done today . . . or tomorrow.
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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, see these sites:
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 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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