When Will Social Security Shortfalls Begin to Pinch?
Although The Political Debate Focuses On 2040 And 2017, The Critical Date Is 2009.
By Jerry H. Tempelman
Jerry H. Tempelman is an investor who specializes in high yield corporate debt securities. Mr. Tempelman holds the Chartered Financial Analyst designation, and is a member of the CFA Institute. He received his education at Harvard’s John F. Kennedy School of Government, Boston University, Bethel Theological Seminary, and Erasmus University Rotterdam in the Netherlands.
The impact of Social Security’s eventual insolvency will be felt as soon as the balance between income and cost of Social Security will begin to shrink, which is currently projected to occur in 2009. This is because a shrinking Social Security surplus reduces government’s ability to rely on that surplus to help fund the rest of its operations as it does now. The shortfall will need to be made up by increased taxation or borrowing, by reduction of Social Security benefit payments or of non-Social Security government programs, or a combination of these alternatives.
By Jerry H. Tempelman