Social Security and Medicare are in financial trouble, but these people are going to save them

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Social Security and Medicare trustees say these funds are running out of money and older Americans are wondering who will be funding their retirement.

Most people have contributed to these trust funds throughout their working lives. While the monthly Social Security check is barely enough to live on, Medicare is the only way most of us can afford health care in old age.

However, decades of Congress playing three-card monte with our rewards could make us all losers.

“Social Security and Medicare both face long-term funding bottlenecks within the scope of currently planned benefits and funding,” the Trustees wrote in their 2021 report GDP growth lies. Medicare also sees its share of GDP growing by the late 2070s. “

Social Security will pay out $ 2.4 trillion more than it earns over the next decade. The program’s old-age and survivors’ insurance has only 13 years to go to bankruptcy. The occupational disability insurance is in better shape, currently a term until 2057 is forecast.

However, if the accounts are merged, Social Security will run out of money in 2034 when the government automatically cuts benefits by 22 percent.

“Legislators only have a few years to restore the solvency of the program, and the longer they wait, the larger and more costly the adjustments will be,” says his analysis.

The fund for Medicare, the health insurance most Americans over 65 rely on, will run out of money in 2026, according to its trustees. Congress has not adequately funded the trusts since 2003, the report added.

“The costs of Medicare are rising continuously from the current 4.0 percent of GDP in 2020 to 6.2 percent in 2045,” report the trustees of Medicare.

Little Congress has done to improve the financial health of these programs as no solution will re-elect them. You have to raise taxes, cut benefits, or combine both. However, our deadlocked Congress has shown little willingness to compromise.

Finance and policy experts have written dozens of thick reports on how to fix these programs. I have no place in this column to go into that, but every plan is based on rewards accumulated from future generations.

Younger Americans typically fund Social Security and Medicare payments for current retirees. But the next generation just happens to go to the underfunded schools, live in neglected neighborhoods and come from families whose status in this country is questioned by too many Americans.

I have written many times about how the US population would have shrunk in the mid-1970s had it not been for young immigrants to raise their families here. The data from the new census shows that the children of these immigrants will pay for future Social Security and Medicare benefits.

William Frey of the Brookings Institution, a left-wing think tank in Washington, observes that the number of Americans under the age of 18 has fallen by 1 million since 2010, upsetting the balance between young and old. What is more interesting, however, is that the number of young people who identify as white has decreased by 5.1 million, while the population under 18 of other races and multiracial children has increased by 4.1 million.

“For the first time, colored children now make up more than half (53%) of the total youth population in the country and in 21 states,” Frey wrote. “Clearly, Children of Color have not only prevented a sharp decline in the young population, but will account for most of the future workforce growth in the country as they age.”

These are the same children who suffer from income inequality and discrimination, according to the non-profit, non-partisan Annie E. Casey Foundation.

In Texas, a quarter of children have parents who do not have secure jobs and 35 percent live in single parents. Only 70 percent of fourth graders can read. More than a third are obese and have chronic health problems.

“The data suggests that we as a nation are not providing children of color with the opportunities and support they need to be successful,” said the foundation’s Kids Count 2021 report. “States fail to break down barriers that children of African Americans, Indians and Latinos in particular encounter. As a result, almost all index measurements show that children achieve different results despite their potential. “

Congress can raise social security and Medicare taxes, cut benefits for the rich, and insist that retirees pay higher health bills. But none of that will matter if we don’t make the next generation at least as successful as ours.

Chris Tomlinson writes commentaries on economics, economics, and politics.

twitter.com/cltomlinson

[email protected]

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