Early retirements strain Social Security: Is U.S going broke?

In the latest sign the Social Security ticking time bomb is almost ready to explode, an unexpected spike in the number of early retirement claims will cause the entitlement program to run a deficit as early as 2010, nearly a decade ahead of earlier projections.
September 28, 11:49 PM
William Busse

In the latest sign the Social Security ticking time bomb is almost ready to explode, an unexpected spike in the number of early retirement claims will cause the entitlement program to run a deficit as early as 2010, nearly a decade ahead of earlier projections.

The system has suffered not only a 23% increase in early retirement applications, but the severe recession has resulted in the loss of 6.9 million jobs. In this negative feedback loop, older employees lose their jobs and thus stop paying into the system while applying for early retirement benefits when they are unable to secure a new job.

The federal government maintains that there is no cause for alarm even though the Congressional Budget Office says that the system will begin running permanent deficits by 2016, and will be totally depleted by 2036. The government reminds us that the Social Security Trust Fund has a surplus of 2.5 trillion, even though this “surplus” consists of IOU’s from the federal government. The actual surplus has already been confiscated and spent on a wide variety of social engineering projects, countless layers of inefficient and valueless bureaucracies, entitlements and pork barrel projects.

The severity of the Social Security crisis and other growing deficits begs a larger question: Is the US government going broke?

In a 2006 Federal Reserve Bank of St. Louis Review article, Boston University Professor of Economics Lawrence Kotlikoff examined the country’s probable “fiscal gap”. This is explained as the value difference between all future government expenditures, including servicing official debt, subtracted from all probable future receipts.

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http://www.examiner.com/x-16231-Maricopa-C...-US-going-broke