Government accounting for Social Security has devolved over time from deceptive to dishonest to desperate.
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.
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 investors.com. By Jed Graham.