Mr. Steven Gross, the Chief Actuary of the Social Security Trust fund wrote a letter* on 9/15/2008. In that letter he included this graph:
On 2/12/2009 Mr. Gross wrote a letter* to Senator Robert Bennet. That letter contained this graph.
The two graphs describe a financial gearing ratio. Note that the data used in the 2008 graph shows a 'surplus' in this ratio through 2025. The updated 2009 graph shows that surplus is gone as of today. This represents a significant change in assumptions over the five month period. Mr. Gross is telling us something is coming. That 'something' is likely to be on the front pages and impacting the markets sooner than was thought.
The following is a link to a report produced by the Trustees of the Social Security Trust Funds (“SSTF”). http://www.ssa.gov/OACT/TR/TR08/index.html"
This is a status report on the health of America’s Social Security and Medicare system. The conclusions contained in this report should come as no surprise. The system is bankrupt. It is just a matter of time. The magnitude of the problem is enormous. The Trustees estimate that the present value of the unfunded portion is $13.6 trillion.
It is virtually certain that unless the imbalances are addressed in the near future the U.S. Legacy Costs will destroy our economy...
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