Friday, September 14, 2012

Elephant in the Room

There is an elephant in the room. Not the political one. The one no one wants to acknowledge. No one wants to talk about.

Washington politicians don't want to talk about it.

Political groups like AARP don't want to talk about it.

Seniors don't like to talk about it.

Doesn't mean it doesn't exist, and it certainly isn't going away.

The elephant is a serious discussion about what to do about Medicare and Social Security.

In fiscal 2011--which ended on Sept. 30, 2011—the federal government paid a total of $591.492 billion in benefits from the Old Age and Survivors Insurance Trust Fund, according to the Monthly Treasury Statement (MTS) for September 2011.
Through just the end of August of this year, according to the MTS, the federal government had paid $594.643 in benefits from the Old Age and Survivors Insurance Trust Fund.
That means the government had paid $3.151 billion more in Social Security benefits in just the first eleven months of this fiscal year than it paid in all of fiscal 2011.
OK, let's admit it. There is no trust fund.
Well, there is a trust fund, but there isn't any money in it. Not real money. Only IOU's.
Those in denial say the federal government has never defaulted on their obligations so the IOU's are "secure".
Here is the truth.
The accumulated deficit is $16 trillion. That is roughly 100% of GDP.
As if that isn't bad enough, you need to factor in our unfunded liability. The amount we owe for future obligations. Things like federal pensions, Social Security promises, Medicare promises, etc.
The unfunded liability exceeds $100 trillion.
In August, according to the Social Security Administration, there were a record 8,767,941 American workers collecting federal disability payments, and also 2,018,569 spouses and children of disabled workers collecting benefits. Additionally, in August, there were a record 45,505,287 retired workers, their spouses and dependents receiving Social Security benefits.
That is a record 55 million receiving checks from the government. Roughly 1 out of every 6 Americans.
It doesn't include food stamps, rent subsidies, Medicare, Medicaid, public housing. The list is almost endless.
That is the elephant in the room.
Not the political one, but unfortunately we must rely on politicians to fix the problem.
The one they created.
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