The Plight of Baby Booming
I am a Baby Boomer. Not just that, I am a retired Baby Boomer meaning I am on Social Security. Recently Social Security passed the point where revenues exceeded expenses. For many years Social Security revenues, often referred to as "payroll taxes", exceeded the various uses of Social Security money - including but not limited to retirement payments - with the excess going into high interest federal bonds. Of course this was an obvious Ponzi scheme but up until now that fact didn't matter. Payroll taxes were supplementing income tax revenues so nobody really cared. Pay a little more here, pay a little less there, who cares, right? It all evens out.
Well at least it all evened out until now.
Now the Social Security Administration is paying out more than it is taking in. How can it do that? Well it's cashing in its file cabinet full of federal bonds. A decade or so ago that file cabinet of bonds was expected to last until the mid 2030's but you know, that is a meaningless tidbit of information in reality. Why meaningless, you ask? Because in order to turn those bonds into real money the federal government needs to raise money through taxation and borrowing to pay back the principal and interest on those Social Security federal bonds. In other words the Ponzi scheme is over. It's time to pay the piper.
So now, people like me who are on Social Security retirement are 100% dependent on working people for our income. Well that's not exactly true. A large fraction of income tax comes from the wealthy, but all of the Social Security "payroll tax" income plus some of the income tax income plus some of the federal deficit each year (borrowed money) goes into meeting Social Security obligations. In other words we Baby Boomers have become a burden on the working class. That is our plight.
For the past two decades or so I have been saying that there will come a generation here in the land of the free that will not be happy with their plight of being required to support the Baby Boomer generation while we glory in our retirement, which in fact we do tend to do. If you don't believe the glory part, go read AARP The Magazine as well as the AARP Bulletin, both of which celebrate the retirement years.
Well at least it all evened out until now.
Now the Social Security Administration is paying out more than it is taking in. How can it do that? Well it's cashing in its file cabinet full of federal bonds. A decade or so ago that file cabinet of bonds was expected to last until the mid 2030's but you know, that is a meaningless tidbit of information in reality. Why meaningless, you ask? Because in order to turn those bonds into real money the federal government needs to raise money through taxation and borrowing to pay back the principal and interest on those Social Security federal bonds. In other words the Ponzi scheme is over. It's time to pay the piper.
So now, people like me who are on Social Security retirement are 100% dependent on working people for our income. Well that's not exactly true. A large fraction of income tax comes from the wealthy, but all of the Social Security "payroll tax" income plus some of the income tax income plus some of the federal deficit each year (borrowed money) goes into meeting Social Security obligations. In other words we Baby Boomers have become a burden on the working class. That is our plight.
For the past two decades or so I have been saying that there will come a generation here in the land of the free that will not be happy with their plight of being required to support the Baby Boomer generation while we glory in our retirement, which in fact we do tend to do. If you don't believe the glory part, go read AARP The Magazine as well as the AARP Bulletin, both of which celebrate the retirement years.
posted by Bill | 10:48 AM
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