The $7 Trillion Issue Presidential Candidates Are Avoiding

Mitt Romney and social securityFor all the debate surrounding the upcoming presidential election, there's one topic not receiving nearly enough attention: Social Security. Or to be more specific, Social Security's rapidly approaching shortfall.

The program originated as a safety net to help senior citizens whose savings and pensions were decimated by the 1929 stock market crash. Today, it has promises to pay out $41.4 trillion in future benefits, using today's dollars. The problem is that it has just $34.5 trillion in assets and expected income to cover those promises.

The most recent estimates predict Social Security's trust funds (those assets accumulated during a surplus of contributions) will start running a deficit in 2022, thanks to recent payroll tax cuts and the coming surge of baby boomer retirees.

House Speaker John Boehner (R-Ohio) even declared the program is "already facing imminent bankruptcy," giving even more urgency to an issue that 48% of Americans worry "a great deal about," according to Gallup research.

So Why Aren't Obama and Romney Talking About It?

The problem is that there are only two feasible options to keep Social Security solvent: either cut benefits or raise taxes (or some combination of the two).

  • Cutting benefits means either reducing payouts or pushing the eligibility age even further out (the option Mitt Romney favors).
  • Raising taxes could either come as an across-the-board increase or targeted solely at the nation's highest earners (the option Barack Obama favors).


Yet neither of these scenarios is an easy idea to sell -- however necessary it might be. (We've duked it out on both options on DailyFinance.) And that's why, even though Obama and Romney have talked about it, neither are focusing a significant portion of their campaign platform around it.

Time to Take Matters Into Your Own Hands

This is blatant proof that we simply can't trust politicians to prioritize fixing the Social Security debacle. But rather than dwell on their inaction, it should encourage us to do all we can on our own to ensure a wealthy retirement.

This means taking advantage of hidden Social Security loopholes, maxing out tax-advantaged retirement accounts, setting a fixed budget that you follow, and investing wisely. All so that when the time comes to transition from a life of punching the clock to enjoying your golden years, your finances will be safe and secure -- regardless of what the government ultimately decides.

This article was written by Motley Fool analyst Adam J. Wiederman. Click here to read a free report he wrote on how to ensure a wealthy retirement, including tips on how to boost your Social Security checks -- by as much as 25%.

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Wayne Bradshaw

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May 06 2012 at 12:03 AM Report abuse rate up rate down Reply
Wayne Bradshaw

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May 05 2012 at 11:49 PM Report abuse rate up rate down Reply
ha6ai

Lets see ....... Obama has added $6 Trillion to America's debt in less than 4 years. That's more than the total debt added by ALL the past American presidents, combined.

So, if you want to save Social Security, its very easy .... (1) reverse Obamacare, (2) elect Romney, (3) let Romney save Medicare with a few tweaks, (4) lower taxes, (5) elect a Republican Senate.

Lets get big government off everyone's back, and Obama out of office.

April 22 2012 at 1:20 AM Report abuse rate up rate down Reply
John P

We pay enough in taxes already. The problem is the Federal Government keeps bailing everyone out and spending our tax dollars. That's why we have a 15 trillion dollar debt. No matter how much they raise taxes, Americans will never be able to pay the estimated $600,000 each that it would take to balance the budget. Our Congress needs to be put in prison for bankrupting America. If you couldn't pay your household bills, no one would be there to bail you out!

April 09 2012 at 1:39 PM Report abuse rate up rate down Reply
jkcow

Why did Obama's tax cut for the working class come from SS and not income taxes? The answer is that it doesn't increase what he feds owe to SS. This way they don't have to count it against the deficit.

April 02 2012 at 11:51 AM Report abuse +1 rate up rate down Reply
Ray and Virginia

now is the time for Gov. to pay back for all the years that they stole the funds that were in SS thne there is all the interest that is due we are not dumb Goverment

April 02 2012 at 10:25 AM Report abuse +1 rate up rate down Reply
nikin78

It may be getting better, but not for the graduating students. You see when millions of people lose jobs, millions of people look for jobs. When millions of people look for jobs inexperienced graduates lose out and so do experienced older workers (age 50+). Im sure experienced younger workers age 25 to 45 are doing fine. No data to back that up. My assumption is that older workers are obsolete and companies don't want to hire somebody and then realize that they are going to retire. They won't hire inexperienced graduates because they are inexperienced. That leaves everybody else, which companies know they can get. So they meticulously comb through the masses to find the best candidates. You see the top people were the ones that were kept. The average people were let go and now the companies are looking for the top half of the average people. We are in a rebuilding period. It will take time to get back up.

Having said all of that, illegals are not taking all of our jobs. Jobs that you need a college degree for don't hire illegals. If you got a degree in sociology, language arts, communications, etc., you deserve to be unemployed. Where in a business is this needed? Exactly they don't need them, which means with your college degree you are still a dumbass, because you got a degree in something easy that nobody cares for.

For degreed jobs I do think your appearance and social behaviour helps to get the job. I got a job in March of 2010, and was told that I got it because I was just as qualified as the others, I was well spoken, and I dressed appropriately for the interview. I was told one lady didn't make eye contact and was socially awkward in the interview.

I am now looking for another job and I applied to 5 jobs. I got one phone interview and one onsite interview with two different companies. Those interviews came about a week after applying for the job. When the recession hit I couldn't get a call back for anything. I was out of work for a year and 3 months. It's a good sign when I get calls for things I know I can do. I think things are getting better, but time will tell. We need more jobs regardless, to even the playing field so companies don't have the upper hand.

April 01 2012 at 11:56 PM Report abuse rate up rate down Reply
mynetmovies

JUST STOP GIVING TO OIL COMPANIES AND TAX MORE THE RICH....

April 01 2012 at 11:00 PM Report abuse rate up rate down Reply
1 reply to mynetmovies's comment
democracks0

I AGREE. RICH GUYS LIKE OBAMA DON'T PAY THEIR FAIR SHARE

April 02 2012 at 11:18 AM Report abuse +2 rate up rate down Reply
cabo79

There is NO "TRUST FUND" anymore than their is a "fund" to pay the countless Banks, Governments that the US owes. SS is a "promise to pay" the American worker for a liftime of work building this Country. The US government CAN pay. Your Professional Politicians just have to raise the tax or the cap. NO GUTS

April 01 2012 at 10:55 PM Report abuse rate up rate down Reply
Steven

People you should really understand the "borrowing" that happened and how it is of no consequence. When a government borrows vfrom itself, no money actually moves. You have to understand that the basic concept is that SSA buys T-bills with free and clear money. It is nothing more than accounting trick to make deficits looks smaller. In the end the government is going to pay itself back. Considering the government controls money production it can produce more money to pay the balance. The balance of the trust is the same either way. That total asset number includes all borrowed money. The problem is that the system was never setup to be sustainable and it is coming to a head. SS is on a scale with one end being no SS and the other being that GDP is taxed at 100%, essentially a micromanaged economy. It will eventually endup at one of those endpoints. It is a pyramid scheme in its purest sense. You have to continuely increase the amount of "investors" to keep up with "ROI payouts." That doesn't correlate with historical population trends. SS is a prime example of how government intervention does more harm than good. I think it is going to be the undoing of this country and it was all at the hands of FDR. He did nothing more than take everything bad about the great depression and bundle it up and boot it off into the future where it can hit us harder. You might as well prepare for a revolution against the liberals. Historically it is the next logical step to restoring this country to what it was meant to be.

April 01 2012 at 7:59 PM Report abuse +2 rate up rate down Reply