Social Security is in Crisis
Does Social Security Need a Bailout?
There has been no official announcement that Social Security is in the negative this year. This is not something the government is eager to discuss. Social Security has not been in the cash negative since the early 1980's. Will benefits have to be reduced? There will already be no Cost of Living Adjustment this year, perhaps this is part of the reasoning.
Our economy has not been kind to senior citizens, or any of us for that matter. Stock prices are down and home values have declined. Social Security has become more important as a source of income to senior citizens in this country than ever before. Should we be worried? Yes, we should. In a country where Social Security provides more than one half of the income for retirees, and the current decline of the economy, America's senior citizens may be in for some financial hard times ahead.
Our government has been borrowing from Social Security for many years to fund government programs. They more or less write an IOU to themselves. Eventually, IOU's have to be paid. The government has now found itself in a situation where it will have to raise taxes or borrow even more money to pay these IOU's. The government is in effect mortgaging the future of our children and grandchildren.
If you look at the Social Security system and the change in the demographics, you can understand some of the reasons the system is failing. When Social Security first began in 1935, for every retiree there were 43 workers. Presently, there are 3.3 workers for every retiree. In twenty years, this number will be only one. People are living longer and collecting more from the system. In order to bring the system to financial stability, Congress would have to raise taxes by 18 percent or cut retirement benefits by one third. These are staggering numbers. The Social Security crisis is no longer a problem of the future. It is a problem of today.
Sources:
http://www.usatoday.com/news/opinion/editorials/2004-02-23-our-view_x.htm
http://www.foxbusiness.com/search-results/m/21450257/social-security-crisis.htm
http://www.socialsecurity.org/congressional/keypoints/ss-trouble.html
Published by Janet Hunt - Featured Contributor in Business & Finance
Janet Hunt is a freelance writing professional specializing in business and finance. She has published articles for such online publication sites as Demand Studios, Associated Content, and various other onli... View profile
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45 Comments
Post a CommentThank you for reporting! We need to prepare for the fact that SS will not be there for us.
This is so scary for those of us who have contributed all our lives.
That's one thing the government will never bail out because it wants to get rid of its seniors anyway. I'm pretty sure there will be no social security when I'm ready to draw it in a few years. So they will succeed in being the death of me for certain. No health care and no SS means no existence for those of us who don't have another pension or, like me, can't draw it till they are so old you aren't likely to be alive anyway.
There is another option. Lower the age of adulthood by 1 or 2 years. Change the high school graduation to 16 instead of 18 like in other European modern nations. This will make more workers. God bless. Great article.
I guess me and Mesei will shack up in an old abandoned farm house on the mountain and live off the land like Grizzly Adams.
I don't understand this stuff. I'm lucky my own money situations don't stress me out so much I cry. Issues at other place always did.
Great reporting!
You summed this up quite well Janet!
an excellent article!
This is truly a concern for all of us.