The CBO revealed that for 2013, social security beneficiaries will receive $816 billion in benefits while revenues from payroll taxes will be $846 billion. It is not totally bad news for the Social Security since there would still be a surplus of $30 billion left for the program. However, the agency estimated that by 2023, the outgoing fund will exceed by $1.4 trillion while the federal government can only collect a total of $1.3 trillion by that time. Obviously, there will be a shortfall of approximately $100 billion.
Experts claimed that a closer look at the said report and the assumptions exhibits a Ponzi scheme that is going to fail sooner than expected.
By definition, Ponzi scheme is a fraudulent investment operation that pays returns to its previous investors through their own money or the money paid by recent investors rather than from the profit earned by the individual or organization running the operation.
Following the said report, financial experts claimed that the funds supporting Social Security which include Old Age, Survivors and Social Security Disability Insurance trust funds will go empty by 2031.
Also, experts speculate that the current beneficiaries that are just now becoming eligible for retirement benefits will likely suffer huge cuts in their checks by the time they turn 80. Unfortunately, that is the time when they needed financial support the most.
Unfortunately, under the current law that is quoted herein, the Social Security Commissioner “may not pay benefits in excess of the available balances in a trust fund, borrow money for a trust fund, or transfer money from one trust fund to another.”
Well, at some point, the said law serves just right since if the commissioner will borrow or transfer money from another trust fund, the scheme would most probably get worse than ever as a result of indebtedness, as commented by a Los Angeles long-term disability lawyer.
