RSSSocial Security and Medicare Cash Surpluses and Deficits
This is the first, and only, chart in this presentation that is expressed in terms of constant dollars, with a base year of 2008 having been selected. This chart attempts to quantify the size of the commitment that lies ahead with Social Security and Medicare (leaving Medicaid aside for the moment). Using constant dollars removes the inflation factor from the projections thereby bringing some perspective to the numbers. Without this adjustment, the numbers would be far too large to make any sense. The total of the projected deficits—$83 trillion—through the year 2085 averages roughly $1 trillion per year in constant 2008 dollars. Contrast this with the fact that the surplus for the combined programs in 2008 was approximately $69 billion. If the message is not yet clear, it is this…The Spending Trend is not Sustainable.
*Note: Projections based on the intermediate assumptions of the 2008 Trustees’ Reports. The CPI is used to adjust from current to constant dollars.
9 Responses to “Social Security and Medicare Cash Surpluses and Deficits”
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June 19th, 2008 at 10:54 pm
Now is the time for brutal honesty.
To the baby boomers who are about to become eligible for “entitlements” we must be honest and tell them. “We are sorry. We promised to give much more to you than we have to give”.
We certainly can’t “throw them out on the street” but we have to find a way to reduce the amount paid out in a way that is fair to everyone.
…what about double dippers? By double dippers I mean people who retire to collect social security benefits but continue to work a job? You should only be able to collect benefits when you are not able to work. This is especially true since quality jobs seem to be in short supply. If you are old enough to collect benefits then give the jobs to the people in the next generations that desperately need them to keep their heads above water.
….what about people who have made enough in their life to support themselves? Why should they collect benefits?
To the generations that follow we must be honest and say “We are sorry. We have to tax you to death because we promised your parents and grandparents more than we can give them. We understand that this will be difficult for you because at the same time you will have to save for your own retirement days as there will be no money to give you when you can’t work. Please understand that we feel badly knowing in a few years that there will be no money to fix roads, field a military, check to make sure the food you eat is safe, or do anything else that we have done for your parents and grandparents while we spent away your future”.
We must be honest now and make the hard choices which no one will like. The alternative is to do nothing and let the entire economic system plop down like a big pile of cow manure failure.
September 10th, 2008 at 12:47 pm
Remove the cap on SS earnings and you have fixed the problem. I believe social security and medicare should not be included in the budget since they are funded by separate sources. They keep war costs out of the budget so why not SS and Medicare?
September 22nd, 2009 at 9:31 am
bella, you point out the bad behaviors as if they are a drain on the system. In reality, many of these people die before they ever get old enough to collect SS or Medicare/Medicaid. So in effect, aren’t they good for the rest of us who get the benefit of their lifetime contributions to the programs, they money they will never pull out of the system?
May 13th, 2010 at 10:09 am
I’m new to this, having just registered today (May 13, 2010), so bear with me. Among other things, I notice there is no spell-check, so I hope my typing holds up.
I believe the chart at the top of this page is one of the best one’s Mr. Perot has provided, but here’s another one that might even be better at driving home how serious our debt problems are. It’s from a July 7, 2009 blog entry from the Director of the Congressional Budget Office entitled “Federal Debt Held by the Public Under CBO’s Long-Term Budget Scenarios (Percentage of GDP)”:
http://cboblog.cbo.gov/wp-content/uploads/2009/07/slide2.jpg
To put those projected ratios of debt to GDP in perspective, bear in mind that Greece’s level of 124% this year was largely responsible for their bond rating being lowered to junk status:
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/28/AR2010042800253.html