Thursday, January 27, 2011

CBO: Social Security will be drained by 2037, run a $45 billion deficit in 2011; funny money accounting explained by CNS

The Congressional Budget Office reported today that Social Security will run a $45billion deficit this year, and be broke by 2037.  The CNS (Congressional News Service) story explains the accounting trick here

The Trust Fund is legally obligated to take treasury bonds, with the “interest” counted twice in “balancing” the fund. It’s pretty hard to follow, but it looks like double journal entry accounting with one side missing to me.  I’ve worked on General Ledger before (at NBC in the 1970s).

ABC News carried the story about the empty bathtub shrine by 2037 for social security, and asked if the next generation will see “solvent social security”.

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