Last week a new government report was released warning of the deteriorating financial condition of the nation's two largest social safety nets: Social Security and Medicare. Thanks to the deepening global economic crisis, these two entitlement time bombs are now set to explode even sooner than originally predicted.
In my latest book, "Bankruptcy of Our Nation," I detail the challenges facing America due to our failing entitlement programs. As of last year, the federal government projected that by 2017, Social Security would begin paying out more in benefits than it generates in revenues. Last week's report shifts this date back one year, to 2016. Even more startling is the report's finding that the Social Security trust fund itself will be entirely depleted by 2037. This is four years earlier than the last year's projected depletion date of 2041.
As for Medicare, the outlook is even more bleak. According to this year's report, Medicare will spend more on benefits than it takes in from tax revenues in 2009. And 2017, the Medicare Trust fund will be entirely depleted – two years earlier than last year's projection of 2019.
To understand the full extent of America's entitlement problem, one must have a basic understanding of America's changing demographics.
According to U.S. government birth records, officially recorded since 1910, there are around 78 million Baby Boomers alive today. Each of these 78 million Americans have paid large amounts into government entitlement programs, most often through payroll deductions. Until now, these 78 million Baby Boomers have been funding the entitlement system for the current retirees.
But last year the story began to change as the first wave of 3.2 million Boomers turned 62. Each of them will be eligible under the current government standards to apply for early retirement benefits and to receive a monthly Social Security check for the rest of their lives. Instead of paying into the system, they will begin taking from the system. Later, in 2011, as this first wave begins turning 65, these citizens will become eligible for subsidized health care benefits under the Medicare system. Finally, in 2012, those of the 3.2 million early Boomers who opted not to take early retirement benefits will reach age 66 and will qualify for their full share of Social Security benefits. It is highly likely that a large majority of retiring boomers will take the early retirement option due to the perceived weakness in the Social Security system. And this first wave is just the beginning.
Over the course of the next two decades, the remainder of the 78 million Baby Boomers – or 10,000 people every single day – will retire and become financial and medical dependents of current U.S. taxpayers. They will all retire, and will all demand their fair share of the entitlement pie which includes an assortment of benefits, including Social Security, Medicare and Medicaid.
These three entitlement programs currently make up more than 40 percent of the federal government's annual budget. And this percentage is expected to increase dramatically as Baby Boomers begin taking from the system instead of giving into it.
So what does all of this mean to you as a taxpaying citizen of the United States of America? Well, I wish I had better news. The harsh truth is your nation is bankrupt. America has mortgaged its future and has sought to delay paying the bill for as long as possible. Unfortunately, a combination of poor monetary and fiscal policies, coupled with an entitlement-crazed generation, has led our nation to the precipice of disaster. And the fruit of this noxious combination will be tasted in just a few short years.
If all this sounds like it is going to cost the U.S. government a lot of money, you would be wrong. The enormous bill created by this entitlement crisis is going to fall squarely upon U.S. taxpayers. Hard-working, taxpaying citizens are going to foot the bill for the retirement and medical benefits for the largest group of senior citizens in American history.
Finally, to fully understand the financial pain that these broken entitlement programs will inflict upon our nation, consider the reality of our unfunded obligations. Many citizens are now aware that America has an unprecedented total national debt of $11 trillion. But you may be shocked to learn that this amount does not reflect what the federal government has promised to pay millions of Americans in entitlement benefits down the road. Those future obligations put our real debt figure at nearly $60 trillion – a staggering sum that is about as large as the total household net worth of the entire United States.
Ironically, America's failed entitlement programs, created by politicians under the guise of aiding our nation's citizens, will instead impoverish our children and grandchildren. While our leaders in Washington continue blindly down the path of excessive spending, they are adding astronomical debt loads to America's economic burden. As the various entitlement systems collapse, big government's answer will be predictable: massive tax hikes and more money printing. History is merciful in telling us where this will lead.
So what are you doing to protect yourself and your family from the greatest debtor nation in world history?
And you thought 2008 gas prices were high?
SOURCE: Social Security goes bankrupt - WorldNetDaily
We’re Gonna Need a Bigger Graph - Understanding Obamanomics - Hot Air
Social Security, Medicare in need of extreme help - Atmore Advance