But hey, don't they have those lock boxes full of IOU's they can cash in?
Today’s CBO report has some bad news about the deficit. 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.
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.
I just received my social security statement in the mail yesterday. According to the statement, my employers an I have kicked in $59,911 into the fund over my work history. The present value of that $59,911 is just over 93,000 yielding me a whopping 3.3% over the years.
I'll make a deal with social security. You give me back my original $59,000 in the form of a self directed IRA that can't be cashed out and I'll be more than willing to get out of the social security system completely.
I guarantee that 1) I'll at least have my original principle amount. 2) I'll earn a shit load more than 3.3% during my remaining life.
Send the money to my broker.