Medicare and Social Security are both in crisis as underfunding hits $175 ... trends now
Medicare and Social Security are in crisis and face significant challenges according a report from the U.S. Treasury Department which indicates the programs are both underfunded to the tune of a $175 trillion.
The report suggests that if the current trends continue the programs may not be around when the current generation of American children reach retirement age unless substantial changes are implemented.
Projections suggest that Medicare and Social Security may struggle to meet full benefit obligations within the next decade, with factors like inflation and economic output adding strain due to insufficient funds coming in to support these programs.
'If you take up the entire economic output of every country on planet Earth, it's about $100 trillion. The unfunded liability that U.S. taxpayers face over the next 75 years is $175 trillion,' Adam Andrezejewski of openthebooks.com stated.
In showcasing the magnitude of the situation, Andrezejewski compared the unfunded liability to the entirety of federal spending since the inception of the United States in 1787.
Medicare and Social Security are facing a substantial underfunding crisis, amounting to $175 trillion according to a recent report by the U.S. Treasury
In a recent forecast, the Congressional Budget Office said the gap between outlays and revenues meant that cash reserves would be used up in a decade, forcing a reduction in payments to levels that matched incoming money
The latest projections from the CBO found that the current gap between the outlays from the funds and the revenue received- if continued over the next ten years- will cause the fund to officially hit zero
'Here's another way to look at it. If you take a look at all federal spending since the start of our country when the Constitution was written in 1787, if you add it all up, this number rivals all federal spending since the start of our country,' Andrzejewski said. 'So it's a massive unfunded liability and it threatens to bankrupt our country.'
Social Security spending has been on the rise as more Americans hit retirement age and leave the workforce, solely relying on the fund's benefits.
The Congressional Budget Office (CBO) says cash reserves of Social Security will run out in 2033 and, without reforms, will no longer be able to pay full benefits.
Experts have warned when that happens, payments will not disappear altogether but will likely be cut by around 25 percent.
The Office spelled out the problem with the steady-as-she-goes approach in its most recent forecasts.
'In those projections, spending for Social Security increases rapidly
