WHERE IS THE MONEY?
February 14, 2005
Sources ranging from the Congressional Budget Office to Democratic pundits are saying that the U.S. Social Security system can pay retirement benefits until at least the year 2042. However, one thing most of them fail to mention is that this payout would be deficit spending, according to Matt Moore, a policy analyst with the National Center for Policy Analysis.
Whether the federal retirement security program pays full benefits to 2042 or not, the mathematics of the Social Security Administration's annual revenues back up President Bush's recent dire predictions that by 2027, the system will be $200 billion short.
According to Moore, the problem with the program is evident in the figures:
- The ratio of contributing workers to Social Security benefits recipients has dropped from 16:1 to approximately 3:1 since the program's inception.
- What that means is that in 2018 the program will start paying out more money in benefits than it collects in taxes.
- The solution is for the federal government to borrow from the Social Security Trust Fund until it empties in 2042, which unfortunately leads to the next problem: There's no cash in that trust fund -- there are only government bonds.
So the question is: Where are we going to come up with the two to three trillion dollars that's going to be required between 2018 and 2042 to redeem all those bonds?
It is a good question, and Moore agrees that no matter which way the fingers in Washington are pointed, Social Security is going to cost money to fix -- money that even now is owed to workers as part of the National Debt.
Source: Ed Thomas, "Policy Analyst Says Math Backs Up Bush's Social Security Concerns," Agape Press, February 9, 2005.
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