Time Bomb

Social Security is toast.

So is Medicare.

Too many of us old people live longer, so there are not enough working people to support us.

Soon both Social Security and Medicare will be broke.

Our politicians don’t have the guts to do anything about it. Or even talk about it.

It’s easy to see why.

Recently, France’s president, trying to keep his country’s pension system from going broke, raised France’s retirement age from 62 to a measly 64.

People have been protesting ever since.

In America, politicians who even hint at such solutions get screamed at by misinformed seniors: “Don’t touch my retirement funds! You took money from my paycheck for years; that’s my money I’m getting back!”

But it’s not. It’s young people’s money. People my age rarely realize that most of us now get back triple what we paid in.

When Social Security began, a government retirement plan made financial sense. Most Americans didn’t even live until age 65. Social Security was just for the minority who did.

But now Americans live, on average, to age 76. I’m 76. Henry Kissinger is 100. Since most of us live so long, there are just not enough workers to pay for us.

Yet our vote-hungry politicians won’t say that in public.

Even Donald Trump cowers, saying, “No one will lay a hand on your Medicare or your Social Security.”

The most clueless, like Sen. Bernie Sanders, even deny the obvious truth. He shouts: “Social Security today is not on the line going broke!”

But it just is. Reserve funds are projected to run out by 2034.

Medicare’s reserves will run out even sooner.

Of course they will. When I first got Medicare, I was surprised how no one even pays attention to costs. Everything seems free.

“Get an MRI,” says my doctor. I immediately do. I don’t ask the cost. The MRI people don’t mention it either.

Months later, I get a complex notice that says my MRI cost $2,625 and I must pay $83.65. Or sometimes, nothing. Who did pay? Blue Cross? Taxpayers? The paperwork is so complex that I don’t even know.

Old people who scour supermarkets to save a dollar on groceries never comparison shop for MRIs or heart surgery. “Why should I? Someone else pays.”

As my new video illustrates, Medicare is a bomb with a burning fuse moving closer.

“Sooner or later, it will blow up,” says economist Dan Mitchell of the Center for Freedom and Prosperity. “Politicians figure oh, well, maybe it blows up in five years or 10 years or 20 years. I won’t be in office anymore.”

Some claim raising taxes on rich people would solve the deficit, but it won’t. There just aren’t enough rich people. Even taking all the money from every billionaire wouldn’t cover our coming bankruptcy.

The only solution is cutting benefits, raising the age when benefits start (sensible, since we live longer) or, Mitchell’s preference, privatizing retirement plans, like Australia and Chile did.

America’s politicians won’t do any of those things.

So what will happen?

“The only other alternative is printing money,” says Mitchell.

“I suspect that’s what America will do,” I tell Mitchell. “We’ll be like Zimbabwe.” Zimbabwe’s president printed money to fund his deficit spending. When the currency collapsed in 2009, Zimbabwe was printing hundred trillion-dollar bills.

Yet politicians don’t learn. In the current debt ceiling deal, Speaker Kevin McCarthy got President Joe Biden to “claw back” unused COVID relief funds and keep two years of non-defense discretionary spending roughly flat.

That’s a little progress. But Biden wants to spend a record $7 trillion next year.

McCarthy said Medicare and Social Security were “completely off the table.”

So the programs are still doomed.

“Sooner or later bad things will happen to senior citizens,” explains Mitchell. “The government will either cut their benefits or all of a sudden start rationing health care. Or reimbursement rates will be so low that you won’t be able to find a doctor or hospital to treat you.”

Photo by Malvestida on Unsplash

3 thoughts on “Time Bomb

  1. He’s probably right concerning the problem, but his solutions are vague and arguable at best. The elephant in the room is something no politician wants to broach. Republicans have been padding tax cuts for decades now. It’s part of the Two Santa Claus theory where Democrats play Santa with benefits and Republicans with tax cuts. So the solution is simple: RAISE TAXES ON EVERYONE! The government needs money to run properly. People benefit from a well run government So we need to foot the bill. Period.

  2. The solution is to engage tax payers In an exercise of federal budget allocation. Tax filers can designate n their returns where their tax dollars will be spent by portion %. Must-pay categories like “interest on the fed debt”. would be pre-allocated leaving the rest to be divided up by the tax filer. By the “rest” I mean everything else is on the table, even social security, Medicare, veterans spending, all of it. Clicking on a big category would offer more granular selections as outlined in the fed’s budget. Tax filers can get as granular as they like with a button off to the side of every page offering “leave the rest of this deciding to the gov.” . If you opt out of this process the “leave it to fed button” is the default. This filer allocation selection is aggregated and provided to fed gov./ congress and to the public. The gov gets scored on how close it gets to aligning with the tax filers selections. The “Guidance” is legitimate , the fed gov has no excuses. Over spending (deficit spending) is not allowed in the modeling, and is a separate issue. This exercise only serves as allocation guidance for spending what’s collected. The constituents’ will shall be done! If it isn’t – then everyone has the same data to justify throwing the bums out. I would hope enough tax filers would participate to be a statistically significant sampling – adherence by the gov could be phased-in over several years (plenty of warning lol ) . I’m optimistic. Feedback welcome.

  3. No Jeff, the solution is not to “raise taxes on everyone”, it’s REDUCE SPENDING EVERYWHERE.

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