How unfunded liabilities drain the treasury
Bernie Madoff took money from people who thought he'd invested it, gave some to others who thought it was a partial return on their earlier investments, and kept much for himself. That's called a Ponzi scheme, and his $50 billion fraud was called the biggest ever. But it wasn't the biggest. Social Security and Medicare are much bigger ones.
These are trillion-dollar scams. Medicare has a $36 trillion unfunded liability. Social Security's is $8 trillion. There's no money to keep those promises.
But Congress isn't investigating this scam. Congress runs it. That FICA money you thought government had saved for your retirement is gone. There's nothing left but IOUs backed by nothing. Your money was spent not only on current retirees but on wars, welfare, corporate bailouts, earmarks, and all the other stuff Congress wants. For years, this was possible because the FICA tax brought in surpluses that allowed government to pay retirees more than they contributed
and still help buy those other things.
Those days are gone. The huge group of baby boomers has started to retire, and that means trouble. In 2008, for the first time, Medicare paid out more than it took in.
So instead of filling the government's coffers and hiding the real size of the budget deficit, the entitlement programs have now begun to drain the treasury. Part of the "problem" is that we live longer. When Social Security started, most people didn't live to 65. Now we average 78.
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