Government accounting for Social Security has devolved over time from deceptive to dishonest to desperate.

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The latest Social Security Trustees report says that benefit promises are fully financed until 2033 and three-fourths financed after that. In short: no crisis.

Here’s the truth, embedded between the lines: At the current payroll tax rate, Social Security would only bring in enough revenue to pay for 72% of all benefits through 2036.

Filling that gap would require an immediate and permanent 28% benefit cut — including for current retirees and disabled beneficiaries — or a 4.4-percentage-point payroll tax hike, equal to $250 billion this year.

Cash Chasm

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While the 2-percentage-point payroll tax cut since the start of 2011 has made sense to spur a struggling economy, it has helped turn Social Security’s serious and worsening cash flow gap into a cash chasm.

Read More at By Jed Graham.

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