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.
7 Responses to “Social Security and Medicare Cash Surpluses and Deficits”
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June 15th, 2008 at 1:17 pm
Recall how concentrated income is in the US. The top 10% of us — households within incomes (excluding capital gains) over about $101,000 in 2006 — receive about 45% of the income (excluding capital gains). [source: Piketty & Saez, 2008 spreadsheet.]
But most of that income is exempt from withholding for Social Security, Medicare, etc.
Simply collecting from the currently-excluded wages would go a long way to solving the problem this chart identifies.
June 15th, 2008 at 1:35 pm
There is no way the United States can continue on it’s present course. There are too many people with their hands out getting something for absolutely nothing. Why are people rewarded for bad behavior? They smoke, they eat the wrong foods, they get no exercise, they have heart attacks. Then they apply for and receive social security and food stamps. That is wrong. Why should people receive money for doing nothing? In addition the political system does not make it possible for any political party to tell the truth. If they do, they will lose the election. People can’t handle the truth.
June 15th, 2008 at 3:44 pm
And the top 10% of US pay almost all of the income tax, and of course, almost all of the ‘corporation’ income tax etc. These folks also control the media and effectively select the candidates in most cases. They do not directly vote in that proportion (of course).
June 17th, 2008 at 9:34 pm
“But most of that income is exempt from withholding for Social Security, Medicare, etc.”
It’s exempt from the social security tax because benefits on that additional tax would have to be paid - that’s how SS works.
It’s NOT exempt from medicare/medicaid tax - that tax is applied to every dollar earned.
June 19th, 2008 at 4:32 pm
re: Bella, Plenty of people, as of recent, have tried to blame the unhealthy for their bad habits (such as smoking, over-eating, lack of exercise), but we should keep in mind what drives this behavior. There is big science (and money) in finding peoples faults, habits, addictions, and personal preferences. This science is funded by fast food companies, tobacco companies, advertizers, and all companies trying to increase their market share. They are in search for, and include the things (ie, chemicals or psychology) which addict people to their products, so it is not fair to blame only the people who suffer from those addictions. We (the entire public) are being attacked on every level to make us buy their products. Some of us are not affected, but that is not the focus of the science. The science focuses on affecting the greatest majority of people possible (be it 10% or 60%) for its particular product. Just about everybody has some kind of habit or addiction, although, not all are as destructive as others. Some people are addicts to fashion, some to sunday football on television. Others always need a cup of coffee in the morning, some have a glass of wine every evening with dinner, others need to crack open a beer when they get home from work. Some women have shoe fetishes, some men need to go hunting. Point is, everyone has some kind of issue that has been invoked either chemically, psychologically, or both. Businesses fund those sciences so they can benefit from them. Anyone who is the unwitting target of that kind of research has little chance, and even strong will power is a poor defense. In other words, the over-eaters are made that way by the food services, the smokers are made that way by the tobacco companies, the couch potatos are made that way by the television companies. All in all, plenty of people die or get injured who don’t have these addictions, due to poor dna, or even, poor judgement (ie, talking on cellphones while driving, etc). Should we investigate every aspect of a persons physical and psychological profile to determine if we are willing to blame them or help them?
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?