Gov't Owes Social Security $5 Trillion

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Investors Business Daily:

The amount of money the federal government has borrowed from the Social Security trust fund, the Medicare trust fund and other government agencies just crossed the $5 trillion mark.

 

Politicians downplay the number, saying it isn't really debt; it's money the government "owes itself." But the bulk of that $5 trillion doesn't belong to the government. It belongs to current and future retirees. The only way this debt "doesn't count" is if the government has no intention of paying its obligations to America's retirees.

 

That $5 trillion is going to come back to haunt us, and soon. According to the Social Security Board of Trustees, Social Security's unbroken string of budget surpluses will come to a permanent end in 2020.

 

From then on, not only will Washington have lost a major source of cheap financing, the money will need to start flowing in the opposite direction.

 

Long-term, the federal government will need to come up with over half a trillion dollars per year to make good on its promises to our retirees. But it won't come up with the money. Raising over half a trillion dollars in revenue would require either raising taxes by 30% or doubling the current deficit.