Social Security: The Recession & Your Government Cheese?

Although it might not have been apparent to recipients, the worst recession since World War II has trimmed Social Security’s finances. And as millions more Americans become eligible, future and current beneficiaries are left wondering: Just how safe are my Social Security checks?

…the system’s break-even date — when Social Security will begin paying out more in benefits than it takes in through payroll taxes — has been moved forward by one year, to 2016, in the most recent Social Security trustees report.

What’s more, the still-sputtering economy might bump that date forward again in next year’s report. The system will make up the shortfall by dipping into its $2.4 trillion trust fund. (The fund, however, is held in government bonds, not cash. Redeeming the securities might require federal tax increases or spending cuts.)

Well, we all know it won’t be spending cuts.

So we are 6 or 7 years from the system’s break-even date, but what does that mean? Well, it isn’t the end, but it certainly could be classified as the beginning of the end. At that point, the system will be on life support. Either payouts will need to be decreased or the supporting taxes will need to be increased. Probably both things will need to happen. It seems that Obama won’t be able to take care of us forever. W.W.FDR.D.?

“If you hear something wrong in your transmission and you fix it immediately, it may be expensive, but it is a heck of a lot cheaper than when gears start to fly out the back of the car,” says David John of the Heritage Foundation, a conservative think tank. “We are at the point right now where the gears aren’t flying off, but they are getting close.”

via Social Security reform, bankrupt, benefits, plan for retirement – MSN Money.