Thursday, June 23, 2016

Social Security and Medicare Solvency ... Kicking the Can Down the Road and Onto the Backs of Future Generations

Medicare premiums will be going up a whole lot for some people next year. And due to our aging society, so will the ever growing number of elderly Americans who depend on Medicare and Social Security for their medical care and financial security. See Higher Earners Face Steep Hikes in Medicare Premiums.

But that premium increase is just another short term 'fix' for our debt ridden country. It won't address the very serious long term entitlements affordability problem which has long been ignored by our can kicking political class of vote seekers.

So if the long term viability and affordability of Social Security and Medicare aren't even being discussed this year, then what will happen in future years and decades? Well, that's where the future generations of voters, and not the current crop, are destined to get the political shaft. And that's precisely why politics sucks.

The simple and harsh truth is that Medicare is currently unsustainable cost wise. So is Social Security, but neither is a topic being talked about by our name calling totally partisan politicians. Hillary and Donald are too busy attacking each other instead of getting Americans prepared to deal with the real problems facing an aging, heavily indebted, overpromised and underfunded society.

Our kids and grandkids will be getting the bill, of course, and the longer we wait to tackle the problem, the bigger that bill will be. But that's not an issue for our current crop of politicians. Unpleasant facts aren't part of their agenda this political season, nor any other.

We're getting older as a society. More and more, Americans are living longer and fewer Americans are entering the workforce. In other words, the ability of We the People to pay for the financial needs of our under saved retirees is getting more difficult each day. And to add fuel to the financial fire, productivity gains, the way to increased wealth as a society, are historically sluggish as no relief to our slow-go economy is in sight --- or in our political plans, for that matter.

On top of these inconvenient facts, our ever growing debt load, as well as that of the rest of the world, is becoming unmanageable. Although interest rates are currently at historic lows, our debt burdens and government deficits will become even bigger when they do increase.

No, it's certainly not a pretty picture. And what are the vote seeking politicians proposing to do about this fiasco? Ignore it, that's what.

American sound bite driven politics has digressed to being all about promising voters with free goodies in the here and now while ignoring and therefore being unable to make good on all these unaffordable promises down the road --- free college, for example.

Social Security, Medicare funds face insolvency over 20 years, report finds says the following:

"A new forecast shows that Medicare’s hospital-insurance trust fund will be depleted in 2028, two years earlier than estimated last year, according to a government review released Wednesday.

Wednesday’s report also showed that Social Security will exhaust its reserves in 2034, an estimate that is unchanged from last year. After that, beneficiaries would face an across-the-board cut in their monthly payments if Congress doesn’t act.

The annual report card from the trustees of both programs contrasts sharply with an election debate that has shifted away from how to restore solvency for Social Security and instead is focusing on whether benefits should be increased. Wednesday’s report shows that both programs’ trust funds see annual outflows exceed income early next decade, making the solvency challenge a more urgent concern for whoever becomes the next president.

Social Security’s disability-insurance program, meanwhile, will exhaust its reserve fund in 2023. It was facing depletion this year, but Congress last fall approved funding changes that temporarily restored solvency.

More than 49 million Americans collected Social Security retirement benefits last year, 10.8 million received disability benefits and 55.3 million were covered under Medicare."

Summing Up 

I doubt if we'll be hearing much, if anything, about this huuuuuge entitlements affordability issue from Barack, Hillary, Bernie or Donald the next few months.

And I am thoroughly convinced that no serious proposals about dealing with it will be forthcoming this political season. Politics sucks.

Meanwhile, the debts pile up, along with the unfunded promises.

Our kids don't need free college. What they need are responsible adults dealing with today's biggest problems so they won't have to deal with them tomorrow.

But that's not going to happen anytime soon.

That's my take.

Thanks. Bob. 

No comments:

Post a Comment