One more thing while I’m still thinking about the history of the budget I mentioned in the previous post. According to the Social Security and Medicare Trustees’ most recent report, the Social Security “trust fund”, the stack of IOUs the system has accumulated over the years, will be exhausted in 2033. Medicare’s HI trust fund will be exhausted in 2024. I think that both of those estimates are highly optimistic. If recent trends continue, I believe the Social Security trust fund is likely to become insolvent by 2020 and the HI trust fund shortly thereafter. It may actually be somewhat sooner than that depending on the timing and depth of the next recession, something almost certain to occur within the next five years.
The Chief Actuary of the Social Security Administration is already on record, questioning the Trustees’ assumptions along much the same lines as I am. He has further gone on the record in predicting that when the trust funds are exhausted, outlays will not decline to meet receipts but, unless the law is changed otherwise, will be augmented by payments from the general fund. I think that’s a correct political calculation.