There have been consistent warnings that at current rates, Social Security and Medicare might not be long for this world. Instead of raising alarms, these pronouncements raised hackles amongst port-siders, who insisted that there was absolutely nothing wrong with Social Security and Medicare, and how dare anyone think otherwise.
High energy prices and an economy that has been slow to rebound are worsening Social Security’s finances, shortening the life of the trust funds that support the program by three years, the government said Monday.
Those trust funds now will run dry in 2033, according to a report issued by the trustees that oversee the massive retirement and disability program.
Medicare’s hospital insurance fund is projected to run out of money in 2024, which is unchanged from last year. The trustees, however, said Medicare spending continues to rise.
Congress enacted a 2% cut in Medicare last year, which is the main reason the trust fund exhaustion date did not advance.
Expect to hear as an excuse the claim that the still-moribund economy is behind the travails of Social Security and Medicare; a claim which does have some truth to it. But that doesn’t change the fact that our entitlement structure is deeply flawed. Downturns in the economy are sufficient to put both Social Security and Medicare seriously at risk.
So the people who warned that the crown jewels of the American entitlements structure were tottering appear to have been right all along. Too bad that the response to those warnings was derision, and not constructive action.