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January 26, 2011
Surprise? CBO Says Social Security Now Officially Broke
Topics: Political News and commentariesAs Kevin D. Williamson puts it over at NRO, today's CBO report has some bad news about the deficit (the U.S. budget deficit this year will jump nearly 40 percent over prior forecasts) ... but CBO has some really, really bad news about Social Security: It's officially broke.
The CBO's revenue/expenditure estimates now place the program in permanent deficit. There had been some hope that payroll taxes would recover sufficiently post-recession to put the program back into the black (the theoretical black) for at least a few more years, putting off the day of reckoning for an election cycle or more. No more: The new CBO estimates put Social Security in the red for as far as the eye can see.President Obama's math is obviously much more suspect than Kevin's "English-major math" ... since, as Kevin goes on to point out, Obama has explicitly rejected the recommendations of his own bipartisan deficit panel, specifically the proposal to raise the Social Security retirement age modestly over the course of several decades. The result, of course, is going to be a financial train wreck for the nation. It's as though as the U.S. debt goes up, Obama's concern goes down. If I was in to conspiracies, which I'm not, I'd say it's almost as though he wants America's economy to fail, and despite his rhetoric claiming the contrary, he has some master plan to bankrupt the country.But there's a bit of camouflage attached: If you include the "interest" that the federal government "owes" the fictitious Social Security "trust fund," then the program is in the black. Which is to say, if you think that borrowing another $1 trillion from the bond market to shift money from one government account to another government account makes the nation $1 trillion richer, then everything's hunky-dory. But if you compare the program's tax income to its benefit outlays, without the "interest" owed, as CBO does, what you get is deficits from this year forward to 2021 of $45 billion, $30 billion, $28 billion, $30 billion, $31 billion, $33 billion, $44 billion, $59 billion, $77 billion, $98 billion, and $118 billion -- by my always-suspect English-major math, about six-tenths of a trillion dollars in the hole.
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Posted by Richard at January 26, 2011 3:54 PM
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