Today the Trustees for Medicare and Social Security released their annual report and - big surprise - the entitlement programs are on a glide path to insolvency:
The Medicare hospital insurance fund for seniors is now projected to run out of money in 2024, five years earlier than last year's estimate. The Social Security trust funds are projected to be drained in 2036, one year earlier than the last estimate. Once the trust funds are exhausted, both programs can only collect enough money in payroll taxes to pay partial benefits, the report said.There's no point in nostalgia for the days when Medicare and Social Security paid out the benefits afforded in the past decades. There's only one future: a reformed entitlement system that bows to current economic conditions and simple math, versus waiting for the inevitable:
If the trust funds are exhausted, immediate benefits cuts would go into effect. Starting in 2024, Medicare could pay about 90 percent of benefits, but that would drop to about 75 percent in 2045. In other words, despite Democratic attempts to savage the Ryan/GOP budget for “ending Medicare as we know it” (starting in 2022), the fact is that “Medicare as we know it” simply won’t be around much longer anyway on it’s current path. Social Security benefits, meanwhile, would receive an immediate 25 percent cut. This is exactly what Paul Ryan is talking about when he stresses to need to address entitlement spending now, on our terms, before cuts are imposed swiftly and indiscriminately.Except for younger voters who fail to grasp the hole being dug on their behalf, I think Americans are waking up to the danger of delay over action and debt over fiscal sanity.