Not so secure?
Not so Secure Social Security. In our discussions we have been eagerly looking at the deficit in relation to GDP. Over the last 30 years the US debt picture has been a concern, however now we look at a new set of standards that baffle the greatest of economists. We have been exploring as a nation the implosion of social security for nearly 2 decades. It has become a political hot potato and brushed over each year in an attempt to not tackle this massive issue. For the first time since the introduction (and rebalance in 1983) of social security the fund is broke. Not theoretical, not in anticipation of the future but now. We are without solvency in our long adored system of retirement security in this country. This was not to happen till 2016! So much for forecasting as a science. The problem, as stated by Stephen Goss (Chief actuary of SS administration) “is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.” This problem in our estimation will only continue to compound as the baby boomer generation substitute their work shoes for golf shoes. Increased payments and less income to tax. Compound this with potential deflation and we are looking for a bailout not unlike the Grecian formula currently unfolding.