The Entitlement Crunch Has Started

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Rector's picture
Rector
Status: Platinum Member (Offline)
Joined: Feb 8 2010
Posts: 505
The Entitlement Crunch Has Started

For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

http://www.google.com/hostednews/ap/article/ALeqM5jWbISwIapd30hnID5R3gGD...

Couldn't happen at a worse time.

SteveW's picture
SteveW
Status: Gold Member (Offline)
Joined: Jan 21 2010
Posts: 490
Re: The Entitlement Crunch Has Started

Thank goodness the Canadian government put the pension on a sustainable basis several years ago. The funds are managed by an independent board of investment professionals, so money was lost last year like your 401K's but at least it's not a government slush fund earning minimal interest.

John99's picture
John99
Status: Gold Member (Offline)
Joined: Aug 27 2009
Posts: 490
Re: The Entitlement Crunch Has Started

Rector rebellis said

Couldn't happen at a worse time.

But if your intention was to suck every last dollar of wealth out of a country, it has been timed to perfection.

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Re: The Entitlement Crunch Has Started

401k's to be converted into UST's. Thats a large pile of money that the gov is just dying to tap into.

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