Recently, the Trustees Report for Social Security and Medicare was released and the news was not good. Social Security will run out of money in 2034. Medicare will be insolvent two years earlier than previously stated, with a new date of 2028. But, this is rosier than the Congressional Budget Office's drop dead date of 2026 that was released early this year.
On top of that bad news, a new report from Pew Charitable Trusts found that, in 2014, State public pension plans were under-funded by $1 trillion. Three states -- Illinois, Kentucky and New Jersey -- have less than 45% of the funds needed to sustain their State pension plans. And, only three states -- Wisconsin, Oregon and South Dakota -- have adequate funding to sustain their plans.
The simple fact is that America is aging. With the lowest birth rates in our history and with people living longer, the sustainability of retirement benefits keeps getting more questionable because there are more people using the benefits than there are contributing to them. Add to that the fact that wages aren't growing at a fast enough rate to fund Social Security and Medicare through FICA and other payroll deductions.
Despite all of this, the nation's lawmakers continue to sit on their hands while letting the clock run out. The time to act is right now. One of the reasons Detroit went bankrupt is because it couldn't afford to pay its pensioners. The same is true for GM when it was forced into bankruptcy. Are we now going to see entire states go belly up for the same reason?
God help us if they wait to act when the inevitable happens in 2026
or 2028 and 2034, because at that point, the problem will be too big to fix. Of course, Hillary Clinton wants to hasten the collapse of Medicare by allowing enrollment 10 years earlier at age 55. Perhaps we should fix it before we talk about expanding it!
Trustees Report: Status of the Social Security and Medicare Programs: https://www.ssa.gov/oact/trsum/
Trustees' report says Medicare will be insolvent by 2028: http://www.modernhealthcare.com/article/20160622/NEWS/160629973
States face pension fund gap approaching $1 trillion: http://www.cnbc.com/2016/08/25/state-pension-fund-gap-to-top-1-trillion.html
Average Hourly Earnings: https://fred.stlouisfed.org/graph/?g=2r4C
Birth rate - Wikipedia, the free encyclopedia: https://en.wikipedia.org/wiki/Birth_rate
Hillary's war on Medicare is big trouble for seniors | New York Post: http://nypost.com/2016/07/19/hillarys-war-on-medicare-is-big-trouble-for-seniors/