Between 2008 and 2030 Some 74 million Americans born between 1946 and 1964 — about 10,000 a day — are retiring into the Social Security and Medicare system.
Nassau County will feel the impact more than many areas as almost 25 percent of its current residents are 65 and over, with many more fast approaching that age, while large numbers of retiring out of state 65-year-olds are streaming into the area.
However, a future disaster is being quietly ignored because no politician of either party is willing to confront the upcoming debt crisis caused by their refusal over the years to reform Social Security and Medicare. They blissfully ignore this elephant in the room that represents a future $84 trillion deficit disaster to come over the next 30 years when it should be a number one priority.
Despite what the government says there’s no money in the so called Social Security “trust fund.” It’s empty. Democrat President Lyndon Johnson was the first to dip into that cookie jar beginning in 1968 and subsequent administrations ever since have helped themselves. That jar now contains nothing but $2.6 trillion of worthless government IOUs in the form of special bonds from the U.S. Treasury.
The late syndicated columnist Charles Krauthammer wrote a column a few years ago debunking the government’s claim of $2.6 trillion in a trust fund that will take us to 2036 saying: “….this claim is a breathtaking fraud. The pretense is that a flush trust fund will pay retirees for the next 26 years. Lovely, except for one thing: The Social Security trust fund is a fiction. … In other words, the Social Security trust fund contains—nothing.”
The federal government has borrowed all of that trust fund money and spent it, exactly as Krauthammer asserted. The federal government, like the stereotypical evil stepmother, has betrayed us by emptying our retirement account.
And this wasn’t even government tax money. It was our money entrusted to the government to invest whether we wanted to or not. We’re “entitled” to get it back. It’s wrong to call welfare, food stamps, Section 8 Housing, health care, aid to illegal immigrants, etc. entitlements. They’re not. They are give-a-way programs funded by our tax payer dollars.
Despite “entitlements” becoming a derogatory phrase, with the insinuation that people are getting something they didn’t earn, the pure definition of the word “entitlement” is indeed appropriate for Social Security. We are entitled because we were forced to pay into the system through non-optional payroll deductions. An entitlement is the fact of having the right to something. If you didn’t pay in, you have no right to get anything out. Tell me where I’m going wrong here.
When I owned a one-man business I paid twice — my portion and the employer’s portion. My first social security deduction was when I was hired as a grocery store clerk at age 16 and I’ve paid ever since.
So now that Social Security has gone cash negative — that means a government that borrowed our surplus Social Security revenues for decades will have to start paying that money back. The question is how ?
As it stands now Social Security has become a massive income redistribution program and not from the rich to the poor. It’s from younger taxpayers to retirees because they are now funding it. In 1960 some five workers supported each retiree but today that ratio has fallen to three-to-one and by 2030 it’ll be two-to-one. When Social Security was first envisioned in 1935 life expectancy in the U.S. was 61 while today it’s 78.7, a double-edged sword as we’re living longer, but benefits are being paid out longer as a result.
According to statistics I’ve seen by the time my seven-year-old grandson is an adult each married couple will be responsible for their very own retiree. What can they expect their taxes to be while struggling to buy a house, and raise a family?
From the very beginning, the design of the Social Security program was the world’s most elaborate Ponzi scheme, with current workers payroll deductions being used to fund retired workers benefits. A private investment fund that operated like this would be illegal and the folks that ran it would be sitting in a jail cell next to Bernie Madoff for the rest of their lives.
If the payroll deductions of the current retirees had been segregated and invested like a 401(k) rather than being spent by the politicians as they saw fit, Social Security wouldn’t be in this mess.
In his recent autobiography titled “I Love Capitalism” Home Depot co-founder Ken Langone says: “Three thousand employees came to work for us fresh out of high school and didn’t go to college, pushing carts in the parking lot. All 3,000 are multimillionaires. Salary, stock and a savings plan. ”
Today 401(k) plans have taken the place of the corporate pension programs of the past, and are enabling many retirees to experience a comfortable retirement. For many Social Security is a supplement while to others, who didn’t save, it’s a lifeline.
Because the system is in serious trouble it needs immediate reform. However, the mere mention of allowing employees even the option of taking a portion of their social security deductions and investing it into a higher interest bearing fund sends politicians, mostly Democrats, into a state of hysteria and fury. Their “Government does things better than you ever could” line of BS got us into this mess.
In 2005 George W. Bush proposed a program that would not raise taxes or cut benefits for current or near-retirees, but allow them an option of establishing voluntary personal accounts by investing a portion of their Social Security funds directly in the stock market in order to generate higher returns. He got nowhere even though one of the best the best ways to begin fixing the program is to provide younger workers with the opportunity to invest part of their Social Security taxes in personal retirement accounts. How can politicians get their hands on your retirement cash if its squirreled away where they can’t touch it?
Unless something is done fast the result will be catastrophic and the federal budget will explode causing the most predictable economic crisis in history — one that politicians created but prefer to ignore because it is considered politically toxic. When all 74 million baby boomers start collecting there will be an $82 trillion avalanche of deficits according to Brian Riedl, a senior fellow at the Manhattan Institute. Mr. Riedl predicts that the unsustainable level of borrowing needed to support it will wreak havoc on global financial markets, interest rates, and economic investment not to mention the federal budget.
Taxing the rich, doubling tax brackets, or even seizing all annual income earned over $500,000 wouldn’t make a dent he calculates. Neither would cutting back on defense and other programs because the Social Security/Medicare crisis is so enormous, it dwarfs everything else.
The only fix is reforming Social Security and Medicare but that window is closing fast since 10,000 boomers are entering the system daily. Fixes include raising the eligibility age and requiring upper income seniors to pay for their own physician and drug coverage, and/or to start reducing current benefits. Otherwise the country risks drowning the next generation in debt Greek style.
This looming crisis magnifies the idiocy of the free college, free healthcare, guaranteed income, free housing and a pony in every back yard concepts of nutty Socialist-Democrats Bernie Sanders, Elizabeth Warren, Kamala Harris, Cory Booker, Alexandria Ocasio-Cortez and other “Let’s make America Venezuela” advocates. Unless the Social Security/Medicare mess is solved there won’t be enough left to even buy a cup of coffee much less all the free goodies these loons howl about. And do we really want an inept government that put us in this Social Security/Medicare mess to control our health care, housing, education, etc.?
Speaking Of Politics: I don’t mind telling folks how I’m voting in the Tuesday, August 28 Republican primary election so here are my choices: U.S. Senator, Rick Scott; State Rep. District 11, Cord Byrd; Governor, Ron DeSantis; State Senator, District 4, Aaron Bean; Commissioner of Agriculture, Denise Grimsley; Attorney General, Ashley Moody; County Commissioner, District 2, Aaron Bell; County Commissioner, District 4, Thomas Ford; School Board, District 3, Jamie Deonas; School Board, District 5, Lissa Braddock; Ocean, Hwy, Port Authority, District 3, Adam Salzburg; Ocean, Hwy, Port Authority, District 4, Carol Franklin; Ocean, Hwy, Port Authority, District 5, John Van Delinder; Circuit Judge 4th Judicial Circuit, Maureen T. Horkan. The only race I’m conflicted about is School Board District 1 between incumbent Donna Martin and challenger Robin Lentz. I know both of these ladies and consider each of them well qualified serious candidates. To me this one is a coin toss.
Nassau County Giving The Bird Back: Mike Mullin, the personable, no-nonsense Nassau County Attorney and Acting County Manager, had a sit-down with the folks from the Jacksonville-based Burdette-Ketchum marketing and advertising agency that recently presented a pair of branding programs to the County Board of Commissioners. In a nutshell Mr. Mullin told the agency head, Will Ketchum, that the county was less than pleased with the agency’s proposals, and in fact was so disappointed it would like a refund. The agency’s $47,000 versions of a new logo, proposed seal, and tagline were met with an unanimous “HUH?” by the Board of Commissioners and vocally criticized by residents attending the public sessions. The Jacksonville firm’s second shot at providing a new logo for the county portrayed an egret in flight in a position that even a yoga instructor would have difficulty explaining. Its previous effort included a seal that featured a railroad track, a spike and what suspiciously looked like a marijuana leaf, along with the tagline: “True to Our Nature.” Mr. Mullin also explained that he’s suggesting that in the future discretionary funds of any sizable amount — like those that funded this silly undertaking under a previous county manager — will have to be placed on the Board’s agenda for approval. In an obvious understatement Mr. Mullin told me: “The public was not well-served by this project.” The Board may take up the refund issue at a future meeting. Good for Mr. Mullin. Now let’s see how much of our money the agency will cough up.
He Said What? Friend and former Tampa Plant High School classmate and “American Spectator” contributor Larry Thorneberry caught my attention again this week when he wrote about New York Democrat Governor Andrew Cuomo trying to walk back his America “was never that great” comments of a few days ago writing: “His accidental candor and slander has created the backlash it deserves from patriotic Americanos,” says Larry. “I’m glad Cuomo has been taken to task for his national insult. But I’m still waiting for the two obvious questions to be asked, dare we hope by a journalist, to wit: If America is as sorry as you seem to think it is Governor, why did your grandparents leave their home in Italy at great effort, expense, and risk to come here? And how did they prosper sufficiently in this awful place to produce the pampered, privileged, arrogant, elitist, know-nothing ingrate that you turned out to be?”
Things That Keep Democrats Awake At Night: A new poll from Rasmussen says that the president’s approval rating among blacks is at 36 percent, nearly double his support at this time last year when it was at 19 percent. Trump won only eight percent of the black vote in 2016. The poll results came despite Trump being in the midst of a brouhaha with fired White House staffer Omarossa Manigault who declared he used a derogatory term for blacks on the set of the reality-TV show “The Apprentice” several years ago. The fact that President Trump received an endorsement from black entertainer Kanye West and that black unemployment figures during the past 18 months have fallen to historic lows are obvious factors in his favorable numbers. Charlie Kirk, the 24-year-old founder of the influential conservative campus group Turning Point USA, cited the poll as evidence that Trump “is breaking the Democrat party as we know it.”
Drinking, Dining & Dancing: Tonight, beginning at 7 p.m. popular local group, Honey Badgers, will be playing at Main Beach’s Sandbar until 11 p.m. while tomorrow Saturday, August 25, VOX, a four-man group whose lead singer I am told used to play backup for Shania Twain, will be on stage at the Sandbar, 7- 11 p.m. Mark Labor Day, Sept. 1 on your calendar because Sandbar is building a special stage on the beach in front of the restaurant and bar for the Honey Badgers’ 7-11 p.m. performance. There will be ample seating with picnic tables outside holding some 80 folks and views from the outside and inside bars, upstairs and down and from the patio. On September 9, the opening day of the NFL, the Sandbar will feature a special performance of the U.S. national anthem, “The Star-Spangled Banner“, beginning at 12:55 p.m. just before kick-off. Tomorrow, Saturday, August 25, from 1-5 p.m. local activist, air traffic controller and all-around nice guy, Paul Lore, has organized a “Music For the Marina” event designed to draw attention to the dismal condition of the Fernandina Beach Marina and explain why he and others think it should stay public and not be sold to private interests. The event will take place at the ‘Welcome Center’ which is located just north of Atlantic Seafood. Participating local musicians are: Hupp Huppman, Sean McCarthy, Amy Basse, Michele Anders, Davis Turner, Jim Barcaro, Sam McDonald and Tony Merz. Mr.Lore suggests folks may want to bring a folding chair.
This is the truest article I’ve read in a long time. I have been worried about the social security system for 30 years. I will be “hoping”to begin drawing in 4 years myself.
I personally have never expected it to be there for my generation and beyond. We are in trouble folks.
Speaking of Politics – I believe Nassau County native Jonathan Petree deserves to be reelected to the Nassau County School Board District 5. He has been serving in that capacity for almost two years fulfilling the unexpired term of Kathy Burns once she became School Superintendent. He’s a very successful businessman, has four children in the school system, is a champion of vocational education, has increased school safety (schools are now getting Government matching funds due to his efforts), supports parents and teachers and is focused on college readiness. His name is the last name on the ballot and a vote for Jonathan is a vote to ensure representation on the Board always working to keep our school system safe and great!
I’d rather have “some polished turd in an empty suit…legally skim from the top” than entrust my money to a group of deranged communists that will steal it all, use it to buy votes, and then tell me I should be excited at the opportunity to fund everyone else’s American Dream…
To solve this, the responsible thing for boomers to do would be to die at age 61.
Solving the social security mess is very easy. I have dozens of practical ideas for this.
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Very sobering Boomer article. Who is doing the numbers on the solution. Certainly not any politicians. Is Canada ready for a Mexican border style influx of American Boomers? Will a gig and solotrepreneur economy be a possible Boomer bootstrap safety net given the obvious implication of your article, social security is dead on arrival.
Dave, the problem with allowing current wage owners the ability to invest even just a portion of the SS tax is that it will disrupt the Ponzi scheme.
Second, since i can’t vote in local election i ask you to vote for Robin. No question she will do an outstanding job and will try to bring more accountability and transparency to the school board and superintendent.
I believe it’s spelled Kanye West. Spell-check seems to have scrambled a couple of letters.
A 1.5 Trillion dollar ($1,500,000,000,000) gift to the plutocrat oligarch class in the GOP’s 2017 “Tax Cuts and Jobs Act”. Then, because these same GOP crooks now confront the unbalanced budget they deliberately caused – after embezzling and gorging on the next 10 years worth of GNP’s productive income. So, in order to cover the hole, they propose taking from Medicare and Social Security to fund their criminal looting of the Treasury. Sure Dave. You and Keogh keep selling that disingenuous hot air to gullibles. https://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017
Love the Cuomo commentary!!! Thanks Dave!
Well done on the evolving problems with social security. One interesting additional fact is that George W. Bush’s dad actually changed the Federal employees’ retirement system to include a private IRA component. That has resulted in two very positive outcomes. Government employees now participate in the returns generated by our private capital markets. That change also relieves Federal taxpayers of some pension liability. I have always though that reform serves as a great model for the social security system and might also go a ways in eliiminating the oft mentioned wealth gap.