Edelman: Endless federal red ink may doom Social Security recipients

[bostonangler]

The sky appears to be the limit for U.S. federal deficits, a reality that has some economy watchers nervous.

According to a new report from the Congressional Budget Office (CBO), the average federal deficit is now expected to hit an eye-popping $1.2 trillion per year between 2020 and 2029—a total of $12.2 trillion over that period.

That’s $809 billion higher than the CBO’s estimate just a few months ago thanks to Congress’s latest budget deal.

The new deficit figures are amplifying fears among some retirement security experts about an inevitable blow to critical entitlement programs. First and foremost: Social Security, which is already dancing on the knife’s edge of insolvency.

“If nothing is done, the [Social Security] Trust Fund is depleted in 2035,” Edelman Financial Engines executive chairman Ric Edelman told Yahoo Finance’s YFi PM. He appeared as part of Yahoo Finance’s ongoing partnership with the Funding Our Future campaign, a group of organizations advocating for increased retirement security for Americans.

Edelman said the depletion of the Social Security Trust Fund would likely trigger a catastrophic sequence of events.

“At that point, under current law, all beneficiaries — everybody getting Social Security checks — will get a check that’s 23% smaller. This could push millions of American retirees into bankruptcy,” he warned.

Social Security and the major federal health care programs like Medicare will account for more than 90% of the projected growth in nominal mandatory spending through 2029, according to the CBO report.

However, the latest estimates from the Social Security Board of Trustees show annual costs are projected to exceed the program’s annual income beginning next year.

Long-term consequences

The relentless pressure from President Donald Trump on the Federal Reserve to further lower interest rates is giving Edelman additional concerns about the country’s financial future.

 

WASHINGTON, DC - NOVEMBER 02: (L to R) U.S. President Donald Trump looks on as his nominee for the chairman of the Federal Reserve Jerome Powell takes to the podium during a press event in the Rose Garden at the White House, November 2, 2017 in Washington, DC. Current Federal Reserve chair Janet Yellen's term expires in February. (Photo by Drew Angerer/Getty Images)

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“In the very short term, it accelerates the economy. The problem is that as the economy heats up as a result of all of that, inflation kicks in, forcing the Fed to then reverse itself and raise interest rates,” Edelman told Yahoo Finance.

“When that happens, bond values get crushed and you begin to see the inverted yield curve and bad things happen in the long term,” he added.

Further adding to that economic uncertainty are tariffs. The CBO says that the Trump administration’s tariff regime — primarily targeting Chinese goods — will reduce real U.S. GDP by about 0.3% by 2020.

“It’s so far not going the way the president predicted, but that doesn’t mean he’s wrong,” according to Edelman. “Is the president crazy? Or crazy like a fox? Nobody really knows yet, and that’s the issue.”

https://finance.yahoo.com/news/cbo-deficit-projection-may-doom-social-security-ric-edelman-190313860.html

 

 

I know Mr. President, just file bankruptcy like you do in business... Oops, this is the federal government you can't do that!!! What a bummer dude.

B/A

[MyLadiesDaddy]

What if he knows money is no longer a problem?

[bostonangler]

7 minutes ago, ladyGrace'sDaddy said:

What if he knows money is no longer a problem?

 

Money is always a problem... After all it is the root to all evil!!!

 

B/A

[nstoolman1]

 

22 minutes ago, bostonangler said:

this is the federal government you can't do that!!!

 

 

It was done in the past. It was a start down the road we find ourselves on today. 

 

https://famguardian.org/subjects/LawAndGovt/LegalEthics/Corruption/USGovtBankrupt.htm

[bostonangler]

3 minutes ago, nstoolman1 said:

 

 

 

It was done in the past. It was a start down the road we find ourselves on today. 

 

https://famguardian.org/subjects/LawAndGovt/LegalEthics/Corruption/USGovtBankrupt.htm

 

The federal government filed bankruptcy? I need to look that up... Thanks

 

B/A

[nstoolman1]

Just click on the link.   1933 

[bostonangler]

2 minutes ago, nstoolman1 said:

Just click on the link.   1933 

I did and that was interesting, however by law the federal government cannot file... 

 

The total Debt acquired by the Federal Government in Washington, DC, is approaching Twenty Trillion Dollars. The question becomes, with the Federal Government in Debt to a degree that could never be repaid, can the United States of America file Bankruptcy?

The Bankruptcy Code provides for many forms of Entities, the opportunity to file Bankruptcy. A Chapter 7 Bankruptcy may be filed by a Corporation or an Individual. A Chapter 13 Bankruptcy can be filed by an Individual but not a Corporation. A Chapter 11 Bankruptcy is a Reorganization that can be filed by an Individual or a Corporation.

There is a Bankruptcy called Chapter 9, which is a Bankruptcy that permits a Municipality to file Bankruptcy through a Reorganization of its Debts. Detroit is the largest City in the United States that famously filed Chapter 9 Bankruptcy.
However, the Bankruptcy Code does not provide a Chapter that would enable the Federal Government from filing Bankruptcy.

Fortunately, the United States of America has its own printing press. The Federal Government can print an unlimited amount of money. Theoretically, the Federal Government could pay off the 18-20 Trillion Dollars in Debt it has acquired tomorrow.

However, if the Government was to do this, you also may need a wheelbarrow of money to buy a stick of gum.
A significant portion of the National Debt is also owed to the very Taxpayers who funded Social Security. When you have your taxes taken from your paycheck to pay Social Security Taxes, you may have believed that those funds were placed in a Trust Fund so that such money would be available when you retire.
Wrong.
For the past thirty to forty years, Congress has been raiding the Social Security Trust Account and has all but depleted such Account.

https://www.jayweller.com/can-the-united-states-of-america-file-bankruptcy/

[nstoolman1]

And yet we became insolvent in 1933. Bankrupt in other words. Just because it

says we can't does not mean we won't. A play on the opposite saying. Just because we can doesn't mean we should. 

[bostonangler]

Just now, nstoolman1 said:

And yet we became insolvent in 1933. Bankrupt in other words. Just because it

says we can't does not mean we won't. A play on the opposite saying. Just because we can doesn't mean we should. 

 

Insolvent yes, but write off debt no... Imagine what the world's nations would do if we told them "sorry the debt you hold is no good"... It would be the end of the world... The debt we hear about is held by people like China, etc..  Adding more debt is not the answer. But Trump has proven to be just another politician writing bad checks... I'm glad I'm old, when this comes to a head it is going to be ugly.

 

B/A

[nstoolman1]

From the link.

 

Sounds like Bankruptcy to me.

 

The receivers of the United States Bankruptcy are the International Bankers, via the United Nations, the World Bank and the International Monetary Fund. All United States Offices, Officials, and Departments are now operating within a de facto status in name only under Emergency War Powers. With the Constitutional Republican form of Government now dissolved, the receivers of the Bankruptcy have adopted a new form of government for the United States. This new form of government is known as a Democracy, being an established Socialist/Communist order under a new governor for America. This act was instituted and established by transferring and/or placing the Office of the Secretary of Treasury to that of the Governor of the International Monetary Fund. Public Law 94-564, page 8, Section H.R. 13955 reads in part: “The U.S. Secretary of Treasury receives no compensation for representing the United States.”

 

 

[umbertino]

54 minutes ago, bostonangler said:

 

Insolvent yes, but write off debt no... Imagine what the world's nations would do if we told them "sorry the debt you hold is no good"... It would be the end of the world... The debt we hear about is held by people like China, etc..  Adding more debt is not the answer. But Trump has proven to be just another politician writing bad checks... I'm glad I'm old, when this comes to a head it is going to be ugly.

 

B/A

 

 

Agreed....It will be very ugly all over the world and obviously some areas will be much more struck and destroyed economically than others......

[MyLadiesDaddy]

12 hours ago, bostonangler said:

 

Money is always a problem... After all it is the root to all evil!!!

 

B/A

Money today is little more than a worthless piece of paper. It's far from evil. 

 

1 Timothy 6:10

For the love of money is the root of all evil: