By Andrew Ward<\/p>\n
After years of being on life support, the government’s decades-old insurance-turned retirement program is once again running into demographic and economic reality. The Associated Press<\/a> reports that for the first time since the last Congressional overhaul in the 1980s, Social Security is projected to pay out more in benefits than it brings in through taxation by nearly $29 billion.<\/p>\n Don’t let guys like former Enron-adviser Paul Krugman tell you that there’s a magical “trust fund” out there that will buy us some time. The so-called “trust fund” is little more than approximately $2.5 trillion dollars<\/span> of IOUs from the Treasury.<\/strong> This intergovernmental debt is the product of years of a spend-thrift government automatically depriving the program’s reserves to pay for other things (e.g. war, bailouts). Yes, this does mean that the “balanced budgets” of the 90s were a farce.<\/p>\n Now, with the shortfall in revenue and the baby boomer generation eagerly moving toward retirement, you can expect the some level of benefits to be cut, the end of the payroll cap, a rise of the official “retirement age,” and an increase of taxes to cover the shortfall in revenue. Oh, and monetary inflation.<\/p>\n