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Guest Post: The Social Security System Is Already Broke

Tyler Durden's picture




 

Submitted by Jim Quinn from The Burning Platform

Free Shit "Disabled" Army Massing Its Forces

Whenever I hear a liberal MSM talking head say that Social Security is not a problem, I want to throw something at the TV. Obama and Romney both declared the Social Security system sound. They lied to the American people that it will only require minor tweaks to keep it solvent for a hundred years. Liberals hate math. The Social Security System has an unfunded liability of $18 trillion. This means our politicians have promised $18 trillion more than they can possibly pay out. I guess $18 trillion is trivial to a liberal minded person like Krugman or Obama. Lucky for them that 99% of all Americans don’t understand what unfunded liability even means. The chart below gives the gory details. The Social Security system had a negative cashflow of $47.8 billion last year, after running a $48 billion deficit the year before. You may notice that 77% of this deficit was created by the SSDI program, where the depressed masses gather after their 99 weeks of unemployment run out. Do you have a headache? Are you depressed because liquor stores don’t accept food stamps? Did you pull a muscle getting on your government provided rascal? Trouble hearing your Obama phone? Then you are eligible for SSDI.

The funniest line item on the chart is the Assets at End of Year line, which shows the Social Security system having $2.7 trillion. Even using this funny number, the SSDI will be broke in three years. Al Gore told us this money was in a lockbox. They take it out of your paycheck and put it into a fund, waiting for you to retire and collect what you’re owed. Right? Wrong! If you tried to observe the vault with the $2.7 trillion on deposit, you’d be looking for a long long time. You see, the noble politicians in Washington DC took the $2.7 trillion and spent it on undeclared wars overseas, ethanol subsidies, investments in Solyndra, turtle crossings, tax breaks for hedge funds, TARP, bailing out AIG, subsidizing GM, $800 billion stimulus packages, cash for clunkers, homebuyer tax credits, predator drones, DHS, Sandy relief and thousands of other buckets of shit. There are nothing but IOU’s in the vault. The $2.7 trillion is long gone. The U.S. government had to borrow $47.8 billion to fund SS last year. They will have to borrow over $50 billion this year. There will be 10,000 per day turning 65 for the next decade. The borrowing will rise exponentially. If the $2.7 trillion actually existed, why would we need to borrow?

The trust funds are required by law to hand over all surplus revenues to the Treasury and the Treasury then provides “special issue” non-marketable bonds—essentially electronic IOUs—to the trust funds in return for the cash. These “IOUs” become part of the national debt. When the Treasury pays “interest” that increases the value of the Social Security Trust Funds it does so by increasing the number of IOUs it owes the trust funds. When the Social Security program runs a net cash flow deficit, as it has in the last three fiscal years, the Treasury needs to borrow cash from the “public” to keep the program funded.

Does this look like a trend that is going to reverse itself or level out with 10,000 Boomers turning 65 years old every freaking day?

These costs will be exceeding $1 trillion per year in the near future. Meanwhile, the number of workers per retiree will continue to fall as it has for decades. In 1945 there were 42 workers per retiree. In 1965 there were 5 workers per retiree. Today there are less than 2.5 workers per retiree. There are only 1.6 full time private workers for every one retiree. With Obamacare working its magic of destroying jobs across the land, there is much less revenue going into the Social Security System. The system is unsustainable and ignoring the problem will not make it go away.

A recent article on Bloomberg below barely scratches the surface of the massive fraud going on in the SSDI program. Those who think we owe them a living are faking disabilities by the millions. The number of annual applications were flat at 2.1 million per year between 2004 and 2007. They now exceed 3 million per year, as the Obama administration has actively attempted to get more people on the dole. In a matter of a couple years, there were suddenly 40% more people getting disabled. Amazing!!!

Shockingly, as 1.4 million people have been kicked off the 99 week unemployment rolls, the number of people applying for SSDI skyrocketed. Just because the scumbags on Wall Street and in the rest of corporate America commit fraud on a massive scale does not mean we should look the other way when lowlifes in our community do the same thing on a smaller scale. The working middle class pays the bill for the cost of both frauds. More than 90% of all the people who go onto SSDI never go back to work. This program was supposed to be short term until people could recover and go back to work. There are now 8.83 million people so disabled, they supposedly can’t work. There are only 12 million officially unemployed people in the country. The government is so incompetent, they barely check the applications for SSDI. Anyone with an ounce of brain power (this disqualifies anyone on MSNBC) knows that at least 50% of the people on SSDI are capable of some form of employment.

The Social Security system is already broke. The money is gone. Pretending all is well is for fools and there are millions of them in this country. If someone within the leadership of this country was honest with the American people we could fix the Social Security system. A combination of age adjustments, means testing, and reconfiguration of income levels subject to the tax could make it viable. Too bad Washington is inhabited by snakes, scumbags, liars and knaves. Corrupt lowlife politicians, lying liberal media whores, and a delusional populace will ignore the Social Security problem until it becomes a crisis of epic proportions. Then they will propose wrong solutions and implement them badly. Some things are easily predictable.

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Sun, 01/13/2013 - 11:41 | 3148706 cranky-old-geezer
cranky-old-geezer's picture

 

 

IOUs are NOT a "surplus", moron.

Sun, 01/13/2013 - 12:06 | 3148766 Jim Quinn
Jim Quinn's picture

Math is hard, especially for dumbasses

Sun, 01/13/2013 - 13:39 | 3148934 Bob
Bob's picture

Is that your "Big Boy" voice, genius?  See my explanation above.

You appear to be an enthusiastic prostitute to the robber class.

Though I guess it's possible that you're a fucking moron or idiot savant. 

Sun, 01/13/2013 - 20:20 | 3149574 itstippy
itstippy's picture

Math is easy.  Politics is hard.  The US Treasury is $16T in debt.  It's unsupportable.  Of that $16T:

About $5T is held by "Government Accounts" - mainly Medicare & SS, plus Federal agency pension accounts.

About $5T is held by "International Investors" - mainly the Chinese & Japanese, plus foreign Sovereign Wealth Funds.

Who do we default on? U.S. Citizens, International Investors, or both?

U.S. Citizens have stopped buying more US debt and want to start cashing in their holdings.  BIG PROBLEM for the Treasury.  Make those fucking US Citizens go away!  We can't be expected to make good on their damned notes; we've already spent the money!

International Investors continue to buy US debt and we want them to continue doing so.  NO BRAINER for the Treasury.  Keep making good on the International Investors' notes, and they'll keep buying more.

Except that the damned US Citizens vote, and the International Investors don't.  Politics is hard.

Sat, 01/12/2013 - 23:11 | 3148099 Atomizer
Atomizer's picture

I have hedged my social security payout on a lockbox promise..

Sat, 01/12/2013 - 23:15 | 3148107 ShortTheUS
ShortTheUS's picture

Total annual SS cost approaching one platinum coin. Maybe Treasury shouldn't have been so quick to close the door on that option.

Sun, 01/13/2013 - 03:09 | 3148406 opencircle
opencircle's picture

Ha ha ! ss cost @one platinum coin?

The entire country gets dumber and dumber! Pray tell me if a coin can be worth one trillion, why can't krugman make the coin worth $17trillion? - we pay off entire debt and solve the entire issue at once including an end to the interest payments! Bernanke keeps buying future debt and we can issue a new coin to him after 10 yrs.

Sat, 01/12/2013 - 23:17 | 3148111 Clint Liquor
Clint Liquor's picture

"Then they will propose wrong solutions and implement them badly. Some things are easily predictable."

If there is anything like a 'sure bet', then betting against Central Planners has to be it.

Sat, 01/12/2013 - 23:37 | 3148141 booboo
booboo's picture

but not before they totally fuck up the lives of a shit ton of innocent humans and destroy a lot of personal property.

Sat, 01/12/2013 - 23:18 | 3148116 Hangfire
Hangfire's picture

The scalene pyramid makes it's first appearance of the day!   

Sat, 01/12/2013 - 23:20 | 3148117 jplotinus
jplotinus's picture

"The Social Security System has an unfunded liability of $18 trillion. This means our politicians have promised $18 trillion more than they can possibly pay out."

I think Quinn was one pundit who foresaw a Romney landslide. If so, small wonder the same pundit would imply the US can pay $0.00 for a public retirement system supported by its own funding on the basis of a typical insurance premium- like scheme that has been in existence for close to 80 years.

Tylers, please find more reliable pundits. If marketoracle appeals to you, please consider using Nadeem Walayat; or, better still, make him a Tyler and also post up Jim Willie who at least refrains from bad mouthing poorer people and kicking them when they are down.

It's Saturday night for goodness sake.

This Jim Quinn ideological drivel is a buzz kill.

:-(

Sat, 01/12/2013 - 23:33 | 3148127 DavidPierre
DavidPierre's picture

Jim Willie understands the who and the why of 9/11.

SmokeyQuinn has not a clue and is proud of it.

TD...

More  Jim Willie... Lose the Quinn and his ilk.!

Sun, 01/13/2013 - 00:02 | 3148199 sangell
sangell's picture

A young Mick Jagger penned some words to describe your ilk.

 

You're the kind of person you meet at certain dismal dull affairs

Talking much to loud, center of the crowd, running up and down the stairs...

 

You'd better stop and look around.

Sun, 01/13/2013 - 00:14 | 3148220 NoDebt
NoDebt's picture

Stick your head in the sand at your own peril.

Can you not see the obvious signs of strain in the system even now, when the tide has just started to gently roll back in?  The tide of demographics has only just begun to tilt in the wrong direction.  It gets worse from here out.  You can debate many things but demographics is impossible.  And demographics isn't the only thing working against it.  All other entitlements nurse at the same teat, and some of them are already much hungrier than SS. 

If you can't even recognize there is a problem at this point, you're too far off in the weeds to pull back.  Best of luck to you.

Sun, 01/13/2013 - 12:09 | 3148771 Jim Quinn
Jim Quinn's picture

You are clearly a government public education graduate.

Math is hard, especially for liberal douchebags.

Sun, 01/13/2013 - 14:34 | 3148957 Bob
Bob's picture

What you don't seem to realize is that your math comprehension is pathetic.  The only reason nobody will call you on it is because they love where you go with it. 

It's not your math that the financial community loves you for, JQ.

You're like the slut who gives it up in gang bangs and then thinks they really, really like you.

Sun, 01/13/2013 - 20:56 | 3149657 itstippy
itstippy's picture

Mr. Quinn, do you recommend we reneg on all our unfunded promises, foreign and domestic, or just the ones made to the U.S. working class?

Math is easy.  Politics is hard.  You are a schill for International Financial Institutions.  I'll accept getting stiffed as long as all the other U.S. Treasury Bond holders get stiffed too. 

No haircut for SS Treasury Bonds without the same haircut for all other Treasury Bonds.  Got it, fool?

Sat, 01/12/2013 - 23:23 | 3148120 Atomizer
Atomizer's picture

On unrelated newz.. Christine Lagarde is chomping on her balls due to low membership FUND enrollment statistics.

 http://www.imf.org/external/mmedia/index.aspx

Sat, 01/12/2013 - 23:28 | 3148125 ebworthen
ebworthen's picture

Since my unemployment ran out I'm considering applying for SSDI.

I mean, if I can't get hired into productive employment after a year-and-a-half of trying I must be disabled in some way.

Sun, 01/13/2013 - 11:34 | 3148694 machineh
machineh's picture

If my mom can make $82 an hour from home on the internet, what's holding you back, e.b.? ;-)

Sat, 01/12/2013 - 23:29 | 3148126 Seasmoke
Seasmoke's picture

that DI column is starting to show some STRESS

Sat, 01/12/2013 - 23:33 | 3148129 Arbysauce
Sat, 01/12/2013 - 23:32 | 3148130 billwilson
billwilson's picture

Talk about a clueless article - totally clueless:

"The Social Security System has an unfunded liability of $18 trillion. This means our politicians have promised $18 trillion more than they can possibly pay out.

That statement is totally incorrect. The unfunded liability will mostly be paid by future worker contributions. The politicians have definitley NOT promised $18 trillion more than they can payout.

Sat, 01/12/2013 - 23:49 | 3148159 otto skorzeny
otto skorzeny's picture

obi-wan- please to enlighten me as to where all of these fucking "future workers" will be coming from-does guarding FEMA camps and being on "illegal assault weapon retrieval squads" count? this fucking ball game we call the USofA is over.

Sun, 01/13/2013 - 11:39 | 3148702 machineh
machineh's picture

bill wilson obviously skipped his AA meeting and chugged a fifth of vodka instead.

Visions of sugarplums dance in his befuddled woolly head.

SocSec won't even pay for a month of decent booze now.

Sun, 01/13/2013 - 11:57 | 3148750 cranky-old-geezer
cranky-old-geezer's picture

 

 

Not future workers, future borrowing.

Long as US govt can keep borrowing money, no problem.   They can borrow the entire $18 trillion, no worries.

 

Sun, 01/13/2013 - 00:12 | 3148213 ebworthen
ebworthen's picture

"Future workers"?

Which ones are those?

The politicians can pay $18 Trillion?  With what?  Broken windows, burned down cities, and a World War?

Sun, 01/13/2013 - 01:01 | 3148285 Matt
Matt's picture

New law to declare all robots as workers, to have taxes, employment insurance and social security deductions. Robots will pay for the system to support humans. We finally found slaves that don't talk back or revolt (hopefully).

Sun, 01/13/2013 - 02:34 | 3148391 Raymond K Hessel
Raymond K Hessel's picture

Are you being snarky or are you a fucking genius?

I can see this as a way to "ask" companies to bring manufacturing jobs to the US based on the logic the Progressives are using.

Sun, 01/13/2013 - 00:27 | 3148236 rich_wicks
rich_wicks's picture

If you take the national debt, and divide it by federal tax revenue, and do this every year you can easily see what is going to happen.

There's no argument about this at all.  The Federal government takes in less than 15% per year of what it owes and it has no way to increase it's income, and will not reduce it's spending.

There will be no social security in just 10 years, it may not even last 2.

Sun, 01/13/2013 - 03:51 | 3148453 Parrotile
Parrotile's picture

With the US sending yet more troops overseas, yet again under the well-worn banner of "Fighting Terrorism", one wonders if there will be anyone alive in 10 years time (maybe even in 2 years time!?)

http://www.zerohedge.com/contributed/2013-01-12/war-terror-spreads-africa-us-sending-troops-35-african-nations

Sun, 01/13/2013 - 20:18 | 3149568 Cathartes Aura
Cathartes Aura's picture

I wonder if BillyBobGates foundation sweat activated "vaccines" will also be immunising all the amrkn troops there?

 

hmmmm?

Sun, 01/13/2013 - 00:52 | 3148275 lasvegaspersona
lasvegaspersona's picture

billwilson

yes they will pay...no doubt about it, they have the printing press. The point is that the money will not come from taxes collected (a large part anyway) and will not come from some fund of saved wealth. The government will create new cash which will increase the risk of inflation. There is a concept in accounting called 'net present value'. It is the amount you would have to have now to pay for a future stream of income (or in this case expense) at a given rate of interest. At ZIRP it comes close to the sum of future apyments not paid for with taxes....that is where the 18T$ figure comes from. If interest rates rise this number would be larger!!!!much larger.

Sat, 01/12/2013 - 23:37 | 3148140 Pemaquid
Pemaquid's picture

Want to drastically reduce the SSDI roles? Announce that the names and addresses of recipients will be made public in six months.

Sat, 01/12/2013 - 23:45 | 3148166 otto skorzeny
otto skorzeny's picture

american people have no shame-do you think people give a shit any more? it's "fuck you and hooray for me" time-or haven't you noticed?

Sun, 01/13/2013 - 00:32 | 3148243 nflux
nflux's picture

if they started getting beat so bad that they really do become disabled then they might start giving a shit

Sun, 01/13/2013 - 01:02 | 3148288 Matt
Matt's picture

Forming a gang of skinheads is NOT the solution.

Sun, 01/13/2013 - 01:10 | 3148298 nflux
nflux's picture

There is no real solution to the problem. The ball is rolling and its only going to get bigger.

Sun, 01/13/2013 - 01:36 | 3148334 BooMushroom
BooMushroom's picture

If you see Jim Bob's name on the disability list, and then see him go open ocean spear fishing, you might turn him in.

If Jim Bob works for you throwing tires, and is collecting disability for a bad back, you might fire him.

Sun, 01/13/2013 - 05:53 | 3148507 John_Coltrane
John_Coltrane's picture

Or better, offer a reward to anyone providing evidence of lack of disability.   Similar ratting out of medicare/medicaid fraud.  We need a more adversial system.

Sun, 01/13/2013 - 20:20 | 3149577 Cathartes Aura
Cathartes Aura's picture

ahhh, more "see something, say something" divide and rule.

git yer merit badges, and a cellphone camera, step right up!

Sat, 01/12/2013 - 23:40 | 3148147 Atomizer
Atomizer's picture

We’ll show you that the proposed US austerity program is nothing more than a farce. Math never lies.. Mark my words!!!

Sun, 01/13/2013 - 02:59 | 3148366 CrockettAlmanac.com
CrockettAlmanac.com's picture

Math once walked ten miles to return a nickel it had overcharged a customer, which was odd because it is Math, after all.

Sun, 01/13/2013 - 22:47 | 3149787 Nikao7
Nikao7's picture

Reminds me of "Figures never lie but liars figure".

Sat, 01/12/2013 - 23:46 | 3148158 newengland
newengland's picture

If I offer someone money for nothing and checks for free, then they will take it. The vote grabbing politicos do this. Phones for all! Or as the Soviets used to say: tractor production up! Big Brother government can work miracles with figures which it controls.

Problem: they soon run out of other people's money to waste. The other people are taxpayers ... and tax dodgers.

No wonder CONgress works hard to gift itself more money and a security armed guard for life covering its families (passed by Obama this week), as it fears to be hanging from lamp posts when the money runs out and its starving voters want revenge. Its voters.

I didn't vote for any of them. They are welcome to their voters.

Sun, 01/13/2013 - 00:43 | 3148263 Totentänzerlied
Totentänzerlied's picture

"If I offer someone money for nothing and checks for free"

Now that ain't workin', that's the way you do it

Sat, 01/12/2013 - 23:46 | 3148164 Bollixed
Bollixed's picture

Found in an email...

Salary of retired US Presidents = $180,000 FOR LIFE.

Salary of House/Senate = $174,000 FOR LIFE.

Salary of Speaker of the House = $223,500 FOR LIFE.

Salary of Majority/Minority Leaders = $193,400 FOR LIFE.

Average Salary of a teacher = $40,065

Average Salary of Soldier DEPLOYED IN AFGHANISTAN = $38,000

Think about this.

Nancy Pelosi will retire as a Congress Person at $174,000 Dollars a year for LIFE.

She has retired as SPEAKER at $223,500 a year.

PLUS she will receive an additional $193,400 a year as Minority Leader. Double dipping.

That’s $803,700 Dollars a year for LIFE including FREE medical which is not available to US...the taxpayers.

She is just one of the hundreds of Senators and Congress people that float in and out every year!

I think we found where the cuts should be made!

/email

Sat, 01/12/2013 - 23:47 | 3148171 otto skorzeny
otto skorzeny's picture

i don't know where that teacher teaches but around here they live pretty fat on the hog for working(and I mean actual TEACHING-not fucking off on institute days or MLKoon holidays) about 120 days a year.

Sun, 01/13/2013 - 02:37 | 3148396 Raymond K Hessel
Raymond K Hessel's picture

Is there a link to the actual laws that proves these salary amounts to be true?  

Have you snoped it?

 

Sat, 01/12/2013 - 23:50 | 3148174 newengland
newengland's picture

I think I see where the cuts will be made when the money runs out, and voters seek revenge upon CONgress. The USA is a big country, but there'll be nowhere to hide for the venal politicos when their voters realise how they have been ruined by the political class, and its apparatchiks in bureaucracy, academia and banks.

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