The government reported today that the recent recession and weak recovery has shortened the life of the trust funds supporting Social Security and Medicare. The annual report projects that the Medicare hospital insurance fund will be exhausted in the year 2024. This is five years earlier than last years estimate. The report says that our Social Security trust fund will be exhausted in 2036, one year earlier than previously expected.
Treasury Secretary Timothy Geithner, who chairs the trustee’s panel, said the new report underscored “the need to act sooner rather than later to make reforms to our entitlement programs. We should not wait for the trust funds to be exhausted to make reforms necessary to protect current and future retirees.” Well, Duh…….
We have been writing for a long-time now about the need for reforms to our big three entitlement programs - Social Security, Medicare and Medicaid. It is time for our elected officials to put aside political posturing and bickering and get down to the serious business of bringing spending under control and creating viable solutions to ensure the solvency of these programs. If delays continue, the investment community understands that it will lead to an increase in interest rates and negatively impact the health of our economy.
