A Succinct Explanation Of America’s Social Security/Medicare Crisis

The ultimate issue is that over the years, the cost of Social Security and Medicare has escalated dramatically and the government, being the government, has failed to demand that people pay as much into the programs as they’re going to take out.

That worked out okay for awhile because of the population bubble created by the birth of the baby boomers. There were so many people paying into the system that it didn’t matter that everyone wasn’t paying his own way.

However, the baby boomers are now starting to retire and there’s no glut of workers to keep the Ponzi scheme going — and that’s what it is. Individuals who set up financial schemes that are constructed the same way Social Security and Medicare are get arrested for fraud because ultimately, somebody always gets left holding the bag.

So, we are left with a fundamental problem: We have 100 TRILLION DOLLARS in promised benefits that we have no way to pay for — and that’s setting aside the fact that we’ve already spent all the money we’ve collected and created bonds that have to be redeemed out of the general treasury, to give people the false impression that their money hasn’t yet been spent.

So, on the one hand, we have people who have been promised things all their life by the government. They’ve paid money in exchange for those promises; so they REALLY feel entitled to get every dime they’re owed. But, the government doesn’t have the money to pay them — and because of the size of the programs, the only way to get the money will be to either DRAMATICALLY escalate taxes on EVERYONE, not just the rich, or to DRAMATICALLY cut back what the programs are paying out over the next few decades. That’s not what ANYBODY wants to hear, but it’s what’s going to happen because eventually — and eventually is probably a decade or two away at best — our choices will become very limited. Either we take one of those two options or jackknife the economy for decades by defaulting or worse yet, inflating the currency into the stratosphere.

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