Is Social Security Bankrupt?

Release Date
March 16, 2011

Topic

Gov't Debt & Spending
Description

Is Social Security bankrupt? According to Prof. Anthony Davies, it isn’t bankrupt yet, but it will be soon. Davies warns that as a simple matter of mathematics, the current system is unsustainable.
To see the timeline in greater detail, visit: http://www.antolin-davies.com/conventionalwisdom/isssbankrupt.pdf

Is Social Security Bankrupt?
The board of trustees of the Social Security Administration and Medicare claim that Medicare and Social Security will be bankrupt within the next 20 to 30 years. So to put things in perspective, these dates come from the board of trustees of Social Security and Medicare, their 2009 reports. You are here at 2011. Social Security Disability deficits began back here in 2005. What that means is that the money that Social Security Disability Insurance brought in, in each year, starts to be less then the amount of money they pay out. So they’re in a deficit situation. However, they still have money in the bank, so they aren’t bankrupt.
Here in 2014, Medicare deficits are projected to start; 2018, Social Security Disability Insurance is now gone bankrupt. These deficits that started back here in 2005 have accumulated. Here the money has run out. Medicare is bankrupt in 2029; Social Security Retirement is bankrupt in 2040. And this is today’s 50-year-olds retiring. This is today’s 40-year-olds retiring. And those 22-year-olds in the audience, your retirement is somewhere out there in the hall. It’s important that we start to think about shutting down Social Security and Medicare. What we do not want to have is our grandmothers thrown out in the street. If we don’t manage this shutdown of Social Security and Medicare, the laws of mathematics are going to throw grandma out in the street.