Social Security Trust Fund a Tad Rockier Than Believed

With the certainty of a Hollywood doomsday asteroid, we know that the financial day of reckoning for Social Security approaches. But whereas giant rocks from space loom ever closer at a steady pace until Bruce Willis drops by to blast them to smithereens, Social Security's demise seems to be accelerating. At least, that's what Investor's Business Daily tells us after running the numbers.

Social Security's financial outlook took another hit this week, as the Congressional Budget Office hiked its estimate for cash deficits from 2013 to 2022 by $212 billion.

The wider deficits — mainly due to weaker revenue estimates — mean a quicker depletion of Social Security's trust fund, after which the program could only afford to pay about 75% of benefits.

Last year, IBD was on the money in predicting, based on CBO's 10-year outlook, that the Social Security Administration would move up the trust fund exhaustion date to 2033 from 2036. Now IBD finds that CBO's fresh estimates point to the trust fund running dry in 2031, though the retirement program's actuaries don't rely on CBO data.

The CBO's latest figures are here (PDF), by the way. You'll notice that the numbers show the Disability Insurance trust fund running out in 2016, though the document assumes that benefits will continue to be paid in full. That's because the law requires the CBO to make that assumption.

But, of course, pay no attention. There's nothing to see here.

Note: As pointed out in the comments, there is no Social Security trust fund, in reality. However, using the government's own phony-baloney assumptions, matters look not so good.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Way Of The Crane||

    The wider deficits — mainly due to weaker revenue estimates — mean a quicker depletion of Social Security's trust fund, after which the program could only afford to pay about 75% of benefits.

    Why do people insist on continuing to push this lie. There is no trust fund! The money goes from your paycheck to some old fart's SS check.

  • Certified Public Asskicker||

    And then that old fart saves it, right?

  • AlexInCT||

    BUT DA IOUs!!!!!1!!eleventy!!

  • sarcasmic||

  • sarcasmic||

    Speaking of farts, I keep passing gas that smells like cat shit. Seriously. It's not like I've been eating their food or anything, but this is fucking gross. I mean, it's so bad that even I can't stand it. And you know your ass is producing an unnatural stench when even you can't stand the smell of your own farts. Ugh. Toxic fumes. I pity my coworkers.

  • some guy||

    I hope you have your own office. At least then they can force you hot box it...

  • sarcasmic||

    Nope. I'm just a lowly cube dweller.

    *phffft*

    Whoops! There goes another one! S! B! D! Muahahaha!

  • AlexInCT||

    You mean WMDs? What did you eat for lunch? Cat shit?

  • sarcasmic||

    No. I mean SBDs. Click the link. It won't bite.

  • Hugh Akston||

    Somebody in my office smells like a loaded diaper.

  • Way Of The Crane||

    Getting old sucks sarc. You have my sympathies.

  • ChrisO||

    Stay away from Chipotle, at all costs.

  • Way Of The Crane||

    Taco Bell is still OK though, right?

  • ||

    What about Taco Del Mar?

  • Hugh Akston||

    El Pollo Loco?

  • ||

    That's my luchador name, asshole!

  • Corneliusm||

    Los Pollos Hermanos?

  • Anonymous Coward||

    Intestinal problems, sarc?

  • sarcasmic||

    Something crawled up my ass and it refuses to die.

  • ||

    You know, I resent these constant Armageddon references. It's like people consider it to be a real movie and not a complete Michael Bay farce.

  • some guy||

    A rag-tag group of oil drillers nuking an asteroid is more believable than Congress solving our country's unfunded liability problems.

  • ChrisO||

    More likely, too.

  • Hugh Akston||

    Deep Impact was much more believable: Government mostly just makes things worse, decides who lives or dies, and then ultimately just gives up and declares victory when things miraculously go its way.

    Also Frodo marries that dude who played Joan of Arc.

  • ||

    Leelee Sobieski is not a ma...I give up. I'm too tired.

  • Hugh Akston||

    I Win.

  • AlexInCT||

    By "tad rockier" you mean the shit is about to implode before the end of the next decade, right?

  • Raston Bot||

    However, following rules in the Deficit Control Act of 1985 (section 257(b)), CBO's baseline assumes that the Commissioner will pay DI benefits in full even after the trust fund is exhausted. Given that discrepancy between the trust funds' operation and the baseline's assumption, CBO is not providing DI or combined trust fund totals for the year of exhaustion and thereafter.

    HAHAHAHA that's one hilarious footnote!

  • Sevo||

    That last link is WONDERFUL!
    I guess the whistling lessons worked; strollin' right by that graveyward.

  • ||

    Can anyone say "Ponzi scheme"?

  • Sevo||

    And the bozos in the link say all we need is a couple more suckers!

  • db||

    No, I'm sobbing too much.

  • sarcasmic||

    Don't worry. Soon as they seize everyone's 401Ks they'll have plenty of money to pay out the benefits.

  • some guy||

    That sounds like a good way to create a "blood in the streets" scenario. People still believe that their SS benefits belong to them. If they aren't willing to give that up, they sure as hell will not give up accounts that are actually in their name.

  • Way Of The Crane||

    My wife's grandmother refuses to accept the fact that she recouped what she paid into the system long ago and currently taking more than her "fair share" because, you know, the dollar was worth a lot more back then.

  • some guy||

    Well, at least she doesn't claim you owe it to her because she killed Hitler for you...

  • Skyhawk||

    This ignores the fact that the money was taken against her will and she could have earned far more in interest over the years were she allowed to keep and invest that money.
    Granted, she may not have done that and the the investments may not have done well. But that's irrelevant, given the current system.

  • ChrisO||

    Yeah, that's a recipe for people hanging from lampposts in DC.

    A large percentage of Middle America is already stressed out. Stealing the 401Ks might be the tipping point.

  • ||

    But it's going to happen anyway, mark my words.

  • some guy||

    I can see it happening, but its going to happen through a tax rate ratchet or through the stealth tax, not through an outright seizing. The Top Men know how to get what they want without causing a riot.

  • sarcasmic||

    Yeah, that's a recipe for people hanging from lampposts in DC.

    Those who rob Peter to pay Paul can always count on the support of Paul.

    The moochers and looters would protect the government class if the producers tried to revolt.

  • ||

    You overestimate our countrymen.

  • mad libertarian guy||

    But only evil anti-government folk have 401K.

  • Drake||

    They will have to use most of it to fund the civil war and rebuild federal buildings.

  • Rasilio||

    STIMULUS!!!!!!!!!!!

  • db||

    I secretly sabotaged my 401(k) with Solyndra stock, so SCREW YOU YOU'RE NOT MAKING A CANOE OUT OF ME!!!!

  • Aresen||

    Well, Team Blue won't even discuss SS benefit cuts and Team Red has a large part of its demographic receiving SS benefits so I would analyse the US situation thus:

    YOU ARE FUCKED.

  • Tman||

    Listen Moosehead, if WE run out of money who is going to buy all your Canadian stuff?

    China? Russia?

    They hate moose.

  • some guy||

    They also don't like maple syrup or hockey. Canada is boned by association.

  • Aresen||

    The primary reason I care about what happens in the US is that, if you go down the drain, we follow in your wake.

    Otherwise, I could enjoy it the way I enjoy the current farce in Greece.

  • ChrisO||

    Sadly, we're not that amusingly dramatic.

  • Hugh Akston||

    Right up until Congress notices how much money and resources are lying around in Canada. Then y'all will suddenly become jihadist threats to America's security and interests.

  • Aresen||

    ...how much money and resources are lying around in Canada.

    We've already pissed away the money. (our average personal debt as a percent of personal income is higher than that of the US at the 2006 peak.)

    The Chinese have bought up the resources.

    The observation that you are fucked does not mean we aren't.

  • From the Tundra||

    Fair point, but where exactly did you spend it? Free agents for the Canucks?

  • Aresen||

    Shopping trips to Bellingham.

  • ||

    It isn't 1812 any more, puckhead.

  • BuSab Agent||

    1812: The Seinfeld War.

  • Romulus Augustus||

    I expect there will still be printing presses in 2031. Should I live that long, I expect my monthly s.s. check will be at least $10,000
    (the AARP will brook no shit) but maybe it won't do more than pay for a couple of Whoppers and small fries.

  • Way Of The Crane||

    I expect there will still be printing presses in 2031. Should I live that long, I expect my monthly s.s. check will be at least $10,000
    (the AARP will brook no shit) but maybe it won't do more than pay for a couple of Whoppers and small fries.

    You think those will still be legal in 2031?

  • Aresen||

    Tofu whoppers.

  • some guy||

    Until relatively recently, these bonds only existed as entries in a record book. However, now when a new bond is issued, it is printed on a laser printer located at the Bureau of the Public Debt's Martinsburg, WV office. The bond is then carried across the room and put in a fireproof filing cabinet. That filing cabinet is the Social Security trust fund.

    Well, at least the filing cabinet is worth something...

  • ChrisO||

    It creates jobs, too.

  • some guy||

    Good point. And in a pinch we could burn the paper for warmth.

  • NeonCat||

    Or use it for toilet paper.

  • Virginian||

    Top. Men.

  • Dr. Frankenstein||

    I see the makings of a caper movie. A criminal band attempts to steal billions in bonds hoping to sell them. Hijinks ensue. At the end of the movie everyone realizes they're worthless IOUs.

  • Corneliusm||

    So, basically Die Hard with a funnier ending?

  • entropy||

    So, whereas before it only existed on paper, now it exists... on paper...

  • Raston Bot||

    When a new bond is issued, it is printed on a laser printer located at the Bureau of the Public Debt's Martinsburg, WV office. The bond is then carried across the room and put in a fireproof filing cabinet. That filing cabinet is the Social Security trust fund.

    http://www.uschamber.com/issue.....-fund-myth

  • prolefeed||

    To sum up: the "SS Trust Fund" consists of a filing cabinet full of IOUs that can only be repaid by stealing money from citizens via taxes, or counterfeiting money by debasing the currency.

    And yet almost everyone thinks there is something real there.

  • gaijin||

    If only they could mint some sort of coin to make all that paper real...

  • entropy||

    Personally I think it's where they burried Jimmy Hoffa.

  • ||

    There's a social security trust fund?

  • gaijin||

    Trust us. Yes there is.

  • Raston Bot||

    yes, and it is a filing cabinet.

  • JW||

    It's filled with the unworthy trust of statist suckers and apologists.

  • Anonymous Coward||

    The CBO's latest figures are here (PDF), by the way. You'll notice that the numbers show the Disability Insurance trust fund running out in 2016, though the document assumes that benefits will continue to be paid in full. That's because the law requires the CBO to make that assumption.

    We need a law that budgets Social Security in unicorn farts. I mean, the law can make fiction into reality, right? Better yet, the law is fully capable of altering the rules of mathematics.

  • db||

    One Unicorn Fart is all you need.

  • fish||

    When a new bond is issued, it is printed on a laser printer located at the Bureau of the Public Debt's Martinsburg, WV office. The bond is then carried across the room and put in a fireproof filing cabinet. That filing cabinet is the Social Security trust fund.

    I HAVE A LASER PRINTER TOO!

    I think you just solved my personal finincial issues!

  • T o n y||

    I'll take advice on the health of Social Security from people who aren't ideologically opposed to the existence of Social Security. Doesn't that sound reasonable?

  • Spoonman.||

    No.

  • Spoonman.||

    Damnit Spoonman., it's TFT.

  • Sudden||

    Y'know Spoonman, you could shame yourself for feeding the troll on TFT, but you didn't feed him much, only threw him the crumb that is "no". You could've mentioned that your own philosophical critiques of SS does not in any way detract from the very real and basic arithmetic of it's unsustainability that is readily apparent to anyone with the most rudimentary understanding of numbers. But you took the high ground, you gave the troll a crumb and let it beg for steak. That is noble, even on TFT.

    I on the other hand would've said:

    "Philosophical criticisms of SS notwithstanding, I am merely the messenger, not the message itself. However, feel free to shoot me, as the sweet release of death is likely more pleasant than the dystopian future staring me in the face."

  • mad libertarian guy||

    I'll take advice on the health of Social Security from people who aren't ideologically opposed to the existence of Social Security. Doesn't that sound reasonable?

    Which means that you will take advice concerning SS from those in your echo chamber who are ideologically opposed to people earning their own money and saving for their own retirement.

  • T o n y||

    You left off the second part, which is necessarily implied: or else they can fuck off and starve to death.

    Maybe if people in your ideological echo chamber hadn't advocated for and succeeded at getting economic policies that see almost all of the nation's gains in wealth go to the top fraction of a percent, people would have some slim chance of making enough money to save for retirement.

    Of course there'd still be the problem that people can't accurately predict when they're going to die. Guess that's a crime punishable by destitution as well.

  • barfman2013||

    *barf*

    *barf*

    *baaaaaaaaaaaaaaaarrrrrrrrrrrrrrrffffffff*

  • Sevo||

    T o n y| 2.7.13 @ 4:26PM |#
    "You left off the second part, which is necessarily implied: or else they can fuck off and starve to death."

    Shithead, you left out the part where there's no money.
    Reality is a bitch, isn't it, asshole?

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement