Socialism works as long as you have plenty of it. But when you run out of other people’s money to pay for it, look out.

Social Security will run a permanent yearly deficit when looking at the program’s tax revenues compared to what it must pay out in benefits, the program’s trustees said Friday in a report that found both the outlook for Social Security and Medicare, the two major federal social safety-net programs, have worsened over the last year.

Medicare’s hospital insurance trust fund is now slated to run out of money in 2024, or five years earlier than last year’s projection, while Social Security’s trust fund will be exhausted by 2036, a year earlier than the prior projection.

The trustees stressed that exhaustion of the trust funds doesn’t mean the programs will stop paying all benefits. Social Security could fund about three-fourths of benefits past 2036, and Medicare could pay 90 percent of benefits past 2024 under current trends.

And assuming no other financial surprises in the meantime. We could keep raising taxes in a down economy, but raising taxes has always been the way out of the problem of the day, but with no thought for the impact down the road. Well, here we are, down the road, with the same problem.

Filed under: EconomicsGovernment

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