Here Comes Trouble: Three Problems

08-21-2009 • The Market Ticker

The CBO's annual Social Security Update is out, and its pretty ugly: This is pretty ugly; we were not supposed to have a negative income-to-outlay view on Social Security for another decade or so. Well, the recession fixed that. Tax receipts are in the toilet but outlays sure aren't. This is a major problem - everyone wants to point to the "zero hour" for Social Security when the "trust fund" goes negative, as is shown in this graph: This, unfortunately, is terribly misleading. The Social Security "Trust Fund" contains nothing other than IOUs. That is, it does not contain money, it contains "special" Treasury Bonds that form part of the "public debt." How much? According to Treasury, about $4.3 trillion dollars worth.

1 Comments in Response to Here Comes Trouble: Three Problems

Comment by Lucky Red

Entered on: 8/21/2009 2:01:30 PM

How can anybody with a half an ounce of brain be surprised by the fact that SS is broke when the country is fighting 3 wars for oil in the middle of a depression while handing out money to the rich like it's going out of style?

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