Thank Democrats

Parking at the gym a couple days ago I noticed that the car in the next parking spot had a bumper sticker that stated “If You Receive Social Security, Thank Democrats”. After I rolled my eyes I thought about it and was less annoyed because after reflection realized that it was at least honest. Honest in making explicit the notion that a monthly social security check should be considered payment in return for a vote. Certainly no politician or the democrat party will ever actually say this (I failed to record the bumper sticker’s origin) but that doesn’t mean that no one thinks it.

Trouble thy name is Social Security. Ostensively social security is funded by the so-called “payroll” tax of which the employer (in a nonsensical world where any employer just has money around to pay for things like this instead of just paying employees less to cover it) and the employee both pay half. For many years social security took in more than it paid out and used the surplus to purchase bonds. The administration has maintained a cut in the payroll tax since the 2009 stimulus creating a deficit in anticipated social security funding. This deficit, along with an increase in beneficiaries per payee, has resulted in social security paying more than it takes in forcing the program to tap into its bonds. That’s what they’re for though, right? That’s right but, the demographic trends alone are not promising requiring even higher taxation rates and/or decreases in benefits for social security to continue.

The bond surplus was expected to last until the year 2041 in 2007. On April 23, that number was revised down to 2033. That’s right, over five years the condition of the social security trust fund has moved eight years closer to bankruptcy. The bonds will be exhausted and there won’t be enough taken in to pay promised benefits. And there’s no reason to believe that the bonds will last even that long based on what has occurred over the last five years.  Because of these shortfalls and a rapidly approaching absolute bankruptcy the program is essentially in turmoil. The way that it works, paying current beneficiaries from the taxes collected today from tomorrow’s recipients is nothing more than a pyramid scheme, problem is that the bottom keeps shrinking and the top has more longevity than once upon a time. Thank Democrats.