Social Security and Medicare finances worsen

WASHINGTON (AP) -- Social Security and Medicare are fading even faster under the weight of the recession, heading for insolvency years sooner than previously expected, the government warned Tuesday. Social Security will start paying out more in benefits than it collects in taxes in 2016, a year sooner than projected last year, and the giant trust fund will be depleted by 2037, four years sooner, trustees reported.



Medicare is in even worse shape. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year, just as it did for the first time in 2008. The trustees project that the Medicare fund will be depleted by 2017, two years earlier than the date projected in last year's report.


http://finance.yahoo.com/news/Social-Security-and-Medicare-apf-15224025.html

 

I am in favor of maintaining these programs, but also reforming the healthcare industry so as to replace the profit-based model that has sent the cost of its services skyrocketing. Take away entitlements and you'd still have this problem.

 

I smell "another" prohibition ending soon, would make hella money on the taxes alone.

 

I think privatization is something that needs to be looked at

 

Yes so Social Security and Medicare can be subject to the same market forces as the banks and real estate industry, great idea.

 

The entire healthcare system (medicare included) in this country is in shambles and needs to be reformed.

 

Agree with you here Bookie, however my concern would be *who* is doing the reforming? I don't want the same people who created this mess doing the reforming. Privatization sounds good on the surface, but your investment options would almost certainly be limited by the government to so-called low risk investments like mutual funds, which in reality are *very* high risk investments, and the financial literacy of Americans as a whole is very low so most folks would not know the difference and another whole set of problems would be created. An example, I just got a new client who is in his 70's had been a conservative and diligent investor his whole life and during his career as a pilot for a major airline. His prior advisor put him in blue chip stocks like Citi bank and mutual funds. He retired 11 years ago with $10k a month in pension from the airline, this year they cut his pension to $2k a month and his overall investment portfolio has lost 72%, he never thought Citi bank could become a penny stock. He now has to go back to work at age 72 to put food on the table, many americans are suffering this same fate trusting in 401k's, IRA's and pensions that invest mostly in mutual funds, which are not low risk and they have little to no downside protections in place. This would be the similar plan they are suggesting for SS and medicaid, which would be asking for major trouble.

 

And your idea just spends more and more money on programs that the government shouldn't even be involved with in the first place. How much money are you willing to part with personally to help prop these programs up?