Why Do We Stick With Broken Social Security Model?

[Geee]

Investors Business Daily:

Politics: In its latest projection, the Congressional Budget Office found that the Social Security Trust Fund had $1 trillion less than expected. Seems it always happens this way. When will Washington recognize that the problem is the model?

In an A1 story Friday by IBD's Jed Graham, the nonpartisan Congressional Budget Office said it now expects the supposedly vaunted and unsinkable trust fund to peak in 2018 and then decline to $2.7 trillion by 2022.

That's a trillion dollars less than what was projected to be in the pot last year.

"The new trajectory suggests that the trust fund's current depletion date of 2036 may jump ahead several years when Social Security's trustees release their annual report this spring, making the retirement program more central to the 2012 election," IBD's Graham wrote.

That means the trust fund runs dry sooner than its projected 2036 bankruptcy date. When that happens, workers can expect a legally mandated 22% cut in Social Security benefits when they retire.

So, after forking over 12.4% of their earnings — both directly and through their employers — for 35 or 40 years, they can look forward to receiving a less-than-zero-percent return while continuing to spend their working lives paying 100% of the promised benefits to current retirees.

They can replace the Social Security shortfall by saving an additional $2,150 a year, but only if they have time to do it — workers approaching retirement will have to save even more — and just to break-even with the promised Social Security payment.

How's that for a raw deal?

[RandyM]

Every politician in Washington knows the model is broken. But there are so many people voters in this country receiving SS checks, the politicians are deathly afraid to touch it. They are too interested in protecting their own butts and getting re-elected. They don't want to make the hard decisions needed to make it a viable system.