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This chart compares the Congressional Budget Office’s (CBO’s) projections for the end of year balance of Social Security accounts from 2008 and 2009. These balances are presented as a percentage of taxable payroll, a weighted average of taxable wages and taxable self-employment income which provides an estimate of the earnings subject to payroll taxation each year.
Prediction: The (so-called) war in Iraq will, finally, end. The war in Afghanistan will end. The Feds will take part of the money being spent on those and shore up SS indefinitely.
Can you imagine the political repercussions of cutting off SS for the Baby Boomers? I doubt there is a politician alive that would be stupid enough to tell us that all the money we put into SS isn't coming back to us.
I think most of us are in denial over the obvious fact that the government has already spent all of the SS Trust Fund. They lied about it and cleaned it out. Kicking every current pol out of office won't put the stolen money back. Putting present and past pols in prison won't put the money back. We will have to find a way to exist without SS because the government is about to default on it. Don't hate me for saying it, but we must face the truth and make some arrangement to carry on without SS. I personaly don't have any idea how we will make it now.
Its likely we will see another extension o retirement age ;rise in SS taxes agin and some reductions i who can collect. But its much more likely that those programs that rely on general fund with no indivdual contribtuions will take the biggest hits in the future.SS is by far the easiest to solve with others like medicaid in real jeopardy as well as other entitlements.
If SS is abolished completely or allowed to go bankrupt, you will see senior citizens attacking police lines with their motorized wheelchairs.
My guess is that you will see some compromise of the following:
* Graduated increase of the retirement age to 70.
* Means testing targeting people with high incomes or 401K balances.
* Suspension of COLA increases of SS payments.
* Increased SS tax rates on businesses, especially large corporations.
To the list that GLS gives above, I would add the raising or elimination of the earnings cap on paying Soc. Sec. tax on wages. However, I don't we'll see suspension of COLA's because too many people depend of Soc. Sec. alone to get by. Social Security is not really broke or bankrupt anyway. As the cash flow goes negative, the Special Treasury Bonds which constitute the Trust Fund will start to be redeemed as needed, and the General Fund will have to pay for this, it's true. However, it will be done because the United States cannot default on its sovereign debt.
Suppose you bought U.S. Treasury Bonds as an individual. Would you consider them "worthless". No, because they are backed by the full faith and credit of the U.S. Government. Your money has been spent, but you assume you will be able to redeem the bonds because you assume that the United States will not default on its sovereign debt. It is the same with the Special Treasury Bonds which constitute the Trust Fund. I agree that the money has been spent, but that does not make them "worthless" at all. They are part of our National Debt, which I agree is growing to disturbing proportions, but that doesn't excuse the exaggerated claims that the sky is falling with regard to Social Security. There is no "crisis" for Social Security, but there will be eventually when the Trust Fund bonds have all been redeemed a few decades down the road (unless something is done in meantime).
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The Social Security Trust Fund
