What could be a sign of more rough roads ahead than the fact that Social Security is now cash-negative? For the first time in decades, Social Security is taking in less taxes and cannot fulfill benefits:
No one has officially announced that Social Security will be cash-negative this year. But you can figure it out for yourself, as I did, by comparing two numbers in the recent federal budget update that the nonpartisan CBO issued last week.
The first number is $120 billion, the interest that Social Security will earn on its trust fund in fiscal 2010 (see page 74 of the CBO report). The second is $92 billion, the overall Social Security surplus for fiscal 2010 (see page 116).
This means that without the interest income, Social Security will be $28 billion in the hole this fiscal year, which ends Sept. 30.
Red flags have been raised about Social Security years ago, but nobody paid any attention. Social Security has become a program that no politician dares to meddle with for fear of upsetting voters. My generation already knows that Social Security wouldn’t last until our retirement, but of course we’re still paying the taxes to support it. Now the problem has gotten so big that any corrective action would surely be lasting and painful, but if Washington politicians have any ounce of sanity left in them, they would make the difficult choice and do the right thing.
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