The Heritage Foundation has been relentless in its warnings regarding the unsustainability of the U.S. Social Security system.
Recently, they wrote that by the time the first of 77 million baby boomers begin retiring in 2011, fewer than three workers will be around to support each retiree — down from 16 per retiree in 1950. That means those workers will have to start forking over bigger “contributions” (read: higher payroll taxes). By 2017, Social Security will begin taking in fewer dollars from taxes than it pays out in benefits. After 2043, absent a massive cut in benefits or hike in taxes, it’ll be broke.
Now AP reports that big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that’s happened since the 1980s.Those deficits — $10 billion in 2010 and $9 billion in 2011 — will add to the overall federal deficit.
Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn’t expect the increase to be so large.
As the deficits rise and federal spending increases, the breaking point is staring us right in the eye, and Al Gore’s promised Social Security “lock box” is nowhere to be seen.