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Social Security now short by 9.6 TRILLION dollars

By Catholic Online (NEWS CONSORTIUM)
June 4th, 2013
Catholic Online (www.catholic.org)

Social Security is more bankrupt than we think. According to the latest report from Social Security's Board of Trustees, the program faces $9.6 trillion in unfunded liabilities over the next 75 years.

LOS ANGELES, CA (Catholic Online) - Previous estimates had Social Security facing an $8.6 trillion shortfall over the next 75 years. Revised estimates from the board now say that the unfunded liabilities are up by at least another $1 trillion from last year.

This is the amount of money that has been promised to people but is not covered under any current plan. That means the government has no way of collecting the required $9.6 trillion it needs to continue paying Social Security benefits for the next 75 years.

In plain English, it means Social Security will be bankrupt sometime in the near future.

The amount of the unfunded liability per household comes out to approximately $83,000. Since most households earn much less than this, it will be virtually impossible for the government to generate the shortfall by taxation alone.

This means that unless Social Security undergoes dramatic reform in the near future, or the nation experiences growth and prosperity beyond all imagining, Social Security will be bankrupt. Young people now entering the workforce who may be planning on Social Security to bolster their retirement should take warning.

Social Security was originally designed to provide benefits for the elderly, survivors, and those with disabilities. However, the retirement of baby boomers has placed a new strain on the program. In addition to this, the number of people receiving disability benefits has skyrocketed, particularly since 2008. When the disability program was first approved, there were approximately 60 workers to every individual receiving disability benefits. Now, there are only 13 workers to every individual receiving disability.

The report also warns that extending Social Security benefits beyond the next 75 years will also increase the amount of unfunded liabilities required to cover the cost of the program. The report estimates that funding Social Security for the next 75 years alone will require a 4 percent increase in payroll taxes, or will otherwise consume 1.4 percent of future GDP.

The report confesses the insolvency of the program. "Projected long-range costs for both Medicare and Social Security are not sustainable with currently scheduled financing and will require legislative action to avoid disruptive consequences for beneficiaries and taxpayers," the report reads.

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