PARKERSBURG, W.Va. – The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.
It's time to start cashing them in.
For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.
Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.
"Trust us with your money now and we'll give it back when you get old" the government told us. It turns out they spent it on other things. But relax. They gave us IOU's to replace it and now they're saying "Trust us. We'll pay it back."
Now the chicken come home to roost - this social security calamity is the beginning of inevitable sovereign default and bankruptcy, after which even these IOUs are worthless. Siphoning money out of Social Security via these IOUs in effect will just mean you were paying a higher, non-redeemable income tax all those years.
ReplyDelete