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Will Social Security be the Next Bailout Candidate?

Will Social Security be the Next Bailout Candidate?

posted to Paul Ryan,  Social Security,  by purple
2/6/2010 9:17:00 AM
2I like this post about Social SecurityI do not like this post about Social Security

For the first time in 25 years, Social Security will spend more on benefits than it will receive in taxes. As a result, the government program may well be the next candidate for a massive government bailout.

The nonpartisan Congressional Budget Office (CBO) released a report last week showing that for the first time in more than two decades, Social Security will be cash-negative. The CBO estimates that Social Security will see an overall surplus of $92 billion in 2010. That sounds good in theory, except that $120 billion of that total is interest income. Excluding interest income, Social Security will see an overall deficit of $28 billion in 2010.

Interest income must be excluded given that it's not actually income. The interest is "paid" in the form of Treasury IOUs; it's not cash with which the fund can pay benefits to retirees. It's merely an accounting entry in a ledger.

Looking forward, the CBO estimates that deficits will be smaller in 2011 and 2012, will then break even for a few years, before deficits again become the norm. These deficits will have to be funded with cash. Plus, they are only expected to grow as the population ages.

Advocates of Social Security reform have long pointed out that the program's solvency would eventually come to an end. Now that it potentially has – earlier than expected – it looks like a bailout maybe on the horizon. Given that Social Security will surely be considered too big to fail, someone will have to pay for it. Whether they fund the bailout through direct taxation or the indirect tax of inflation, it won't be cheap.

Rep. Paul D. Ryan (R-Wis.) has proposed "A Roadmap for America's Future," which has received some national attention lately. The Ryan proposal would preserve the current Social Security plan for people aged 55 and older. For those younger than 55, the plan would provide the option of investing more than a third of their Social Security taxes into personal retirement accounts.

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Re: Will Social Security be the Next Bailout Candidate?
posted by: lex on 2/6/2010 9:30:00 AM
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Never heard of Ryan before. I really like his proposals.

Re: Will Social Security be the Next Bailout Candidate?
posted by: tpaine2009 on 2/6/2010 11:37:00 AM
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Ryan’s bill, H.R. 6110, titled "Roadmap for America's Future Act of 2008" was introduced May 21, 2008

I hate to say it, but it is, or was, the usual populist theme; universal access to health insurance; strengthen Medicare, Medicaid, and Social Security; lift the debt from future generations; and promote economic growth and job creation in America.

All buzz words and directed towards issues that may be too complex, or too expensive to resolve although I wish he could provide practical solutions before its too late.

He’s a very likable guy, speaks well and comes across as a serious public servant.

He is also a 2012 presidential hopeful.

As to Social Security, how do you bailout something with unfunded liabilities of over $14 trillion when you have no money?

Re: Will Social Security be the Next Bailout Candidate?
posted by: Vote2012 on 2/6/2010 6:10:00 PM
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$14 trillion? Yikes

Re: Will Social Security be the Next Bailout Candidate?
posted by: Johnny on 2/7/2010 12:21:00 PM
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Quote from tpaine 2009

"As to Social Security, how do you bailout something with unfunded liabilities of over $14 trillion when you have no money?"

I say print more money! Just kidding.

I hope that what Rep. Ryan will walk what he is talking about. I'm fed up with words from politicians that are not being done. We are left hoping for those words to be materialized.

Re: Will Social Security be the Next Bailout Candidate?
posted by: Vote2012 on 2/8/2010 1:56:00 PM
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There's 80M baby boomers to take care of. They grew up counting on it. Those promises need to be adhered to.

Re: Will Social Security be the Next Bailout Candidate?
posted by: PoliticalCookie on 5/19/2010 12:09:00 PM
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I just hope that one way or another it gets fixed before it is time for me to be on social security. My father and mother contributed to social security and now receive the benefits. It is not much but since I help them out we are managing. After all, it is better to get a little help than no help at all.

Re: Will Social Security be the Next Bailout Candidate?
posted by: BuddyLee on 5/19/2010 8:04:00 PM
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I'd be willing to forgo the amount that I've put into social security in exchange for not having to put money into it anymore.

Re: Will Social Security be the Next Bailout Candidate?
posted by: kay1 on 5/20/2010 10:03:00 AM
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I have been fighting for disability for 4 years now. If social security is no longer there some time in the future, what are people like me going to do? I know quite a few people that are lying to get it while they work full time. Maybe they can weed them out somehow. As it is right now I am 50 and if I were working I can`t retire until I am 67 and 10 months old. The younger crowd has to be older than that.

Re: Will Social Security be the Next Bailout Candidate?
posted by: Orrymain on 5/22/2010 5:07:00 PM
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I've heard most of my life that by the time I reach retirement/social security age, the well will be dry. This issue has been around for decades and what a statement that it's never been fixed.

Re: Will Social Security be the Next Bailout Candidate?
posted by: BuddyLee on 5/23/2010 9:19:00 AM
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The problem as I see it is that social security payments that are withdrawn from our paychecks don't directly go to us. They go to a general fund that politicians feel free to spend however they wish. With more and more entitlement programs being introduced without a real way to pay for them I don't see anything getting better.

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