Tuesday, April 24, 2012

Social Security admits trust fund will run out 3 years earlier than expected, in 2033

The Social Security Board of Trustees reports that the OASDI  (Old Age and Survivors Insurance) trust fund will be exhausted three years sooner than had been expected.  That means that the "trust fund" (if you can call it that) runs out in 2033 (I'd be 90).  The actuarial deficit is 2.67% of the FICA-taxable payroll.   The SSA link is here.

The deficit increased more rapidly because of the FICA tax "holiday" and the increase in energy prices, leading to COLA uptick.

Medicare’s trust fund would run dry in 2024.  

CBS has a detailed story by Jill Schlessinger here.  The AP had a one-sentence story in the Washington Post Tuesday evening as breaking news.

Even more attention will be paid to the “nature” of social security (a “tax” or an “annuity”) in the near future as a result. But if is really a "tax", it is one of the most regressive.  The whole nature of "wages" as compensation comes under challenge in a modern economy.

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