Social Security will run out of funds in 2033-sooner than forecast last year-according to a new government report. Medicare's hospital insurance fund will be gone by 2024. Together, the programs account for 35 percent of all federal spending, and if the trust funds-which are made up of the difference between the payroll taxes paid toward the programs and the benefits doled out-were depleted, benefits would be automatically cut by 25 percent. Social Security's disability insurance faces the soonest expiration-it is now scheduled to run out of money in 2016, two years earlier than projected last year. "By almost any objective measure, the financial health of the Social Security system has entered a concerning decline," the two public trustees of the programs said yesterday in a statement.
These two programs have been resistent to a legislative overhaul thanks to their longstanding popularity, but the next generation to hit 65 might see far fewer benefits if the current system isn't fine-tuned. The recession and high unemployment numbers play a role in the pessimistic Social Security predictions, but so do the unprecedented number of citizens collecting benefits. In 2017, Social Security will pay out $1 trillion in benefits-$275 billion more than last year. In 2011, an average of 100,000 senior citizens joined Medicare every month.
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Chart of the Day
Student loan debt ($867 billion) has leaped over credit card debt ($704 billion) and auto loans ($734 billion) as one of the most pressing financial woe facing Americans. But it's important to remember the context-more Americans are going to college, too, so although average debt is also rising, it's not as stark as the raw numbers alone would appear to show.
Reason to Get Out of Bed in the Morning
Raul Lemesoff, an Argentinian artist, has been driving around Buenos Aires in a huge tank he likes to call the Arma De Instruccion Masiva, or Weapon of Mass Instruction. The tank, full of thousands of books, will stop for anyone who flags him down, and all the books are free.
-GOOD
