Don’t worry, the soon to be broke Medicare and Social Security funds will be backstopped by an insolvent government. From Simon Black at sovereignman.com:
Two days ago the respective Boards of Trustees for Medicare and Social Security released their annual reports for 2018.
As usual, the numbers are pretty gruesome… and the reports plainly stated what we’ve been talking about for years: the trust funds for both Social Security and Medicare are going to run out of money.
In the case of Medicare, the Trustees project that its largest trust fund will be fully depleted in 2026, just eight years away. In the context of retirement, that’s right around the corner.
For Social Security, the Trustee report stated that the program will spend more money on benefits in 2018 than it will generate in income and tax revenue.
So this year will be the first time Social Security has run a deficit since 1982.
But it gets worse. Because according to the Trustees’ projections, the program will continue running larger and larger deficits until it too becomes fully depleted in 2034.
After that, recipients can expect at least a 25% cut in the benefits that they were promised and worked their entire lives to receive.
Again, these numbers come directly from the Trustees of Social Security and Medicare (which includes the US Treasury Secretary).
The reports were so dire that mainstream publications picked them up almost immediately.
Curiously, though, a number of newspapers tried to play down the bad news, dismissively telling their readers that Social Security and Medicare are just fine, and that those sobering projections don’t matter.
These are common refrains. They’ll state, for example, that there’s nothing to worry about because the government will step in and bail out the programs.
Is that so? Well, who is going to bail out the government?
According to the Treasury Department’s annual financial report, Uncle Sam is already insolvent to the tune of $20.4 trillion.
And those numbers are only getting worse too. Treasury’s own projections show annual budget deficits in excess of $1 trillion starting in 2020.
Simply put, a short-term fix of Social Security and Medicare would cost trillions of dollars. And that would just be a down payment on the long-term costs of fixing the programs.
The federal government simply doesn’t have that kind of money. Not even close.
To continue reading: It’s official: Medicare trust fund will run out of money in 8 years