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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Alighieri who wrote (214947)	1/15/2005 11:41:15 AM
From: RetiredNow	Read Replies (1) \| Respond to of 1573943

I define bankrupt to mean obligations exceeding assets on hand. Technically, the SS Trust Fund is already bankrupt, since the NPV of inflows and outflows through 2078 are NEGATIVE $3.7 Trillion. That means there is an UNFUNDED obligation. However, if we define bankrupt to be when SS Trust Fund assets reach $0, then that will be in 2042 or thereabouts. But like any organization with cashflows, things are salvageable, if there is a will. Cash outflows will exceed cash inflows by almost 43% (100/70-1). So when they say, they will have to reduce benefits to 70% after 2042, what they mean is they need to do this to make sure outflows equal inflows, since they don't have any Trust Fund reserves left. Those are the facts as the actuaries of the SS Administration have calculated them. As far as language used, SSA uses the term "exhausted": ssa.gov However, after 2041 this cumulative amount becomes negative, indicating a net unfunded obligation. Through the end of 2078, the combined funds have a present-value unfunded obligation of $3.7 trillion. More relevant information: It then begins to increase rapidly and first exceeds the income rate in 2018, producing cash-flow deficits thereafter. Despite these cash-flow deficits, beginning in 2018, redemption of trust fund assets will allow continuation of full benefit payments on a timely basis until 2042, when the trust funds will become exhausted. This redemption process will require a flow of cash from the General Fund of the Treasury. Pressures on the Federal Budget will thus emerge well before 2042. Even if a trust fund's assets are exhausted, however, tax income will continue to flow into the fund. Present tax rates would be sufficient to pay 73 percent of scheduled benefits after trust fund exhaustion in 2042 and 68 percent of scheduled benefits in 2078.