How Biden Administration’s Social Security Crisis Can Affect You?
US President Joe Biden has brought in many changes since taking office earlier this year. Financially, of course, much has also altered. But what does this mean for millions of residents?
The Biden administration proposes a $4.3 trillion reconciliation bill, and at the same time, a $1.2 trillion infrastructure package that is set to fundamentally change the federal government’s role in the U.S.
Social Security is the single most expensive program the federal government runs. By itself, Social Security already accounts for a quarter of every dollar Washington spends.
When prices go up, so do Social Security payments. Seniors will enjoy the extra money, but problem is that raising Social Security payments to match inflation is likely to cause more inflation, necessitating another increase in Social Security payments, which will cause yet more inflation.
Read More: Social Security COLA Benefits Reduced to 5.9% for 2022
Just as inflation can cause more inflation, one of the biggest drivers of today’s budget deficit is yesterday’s budget deficits. The federal government is currently spending more than half a trillion dollars a year on interest payments for money borrowed in the past — money that already has been spent.
That’s more than the government spends on any cabinet agency except the Department of Defense — and the cost of interest payments is getting close to that. We are something like the fool who uses a new credit card to pay his old credit card without ever paying down the debt, instead of adding to it every day.
Last month’s U.S. Treasury’s 2020 annual Social Security and Medicare report confirmed Social Security is running out of money faster than previously thought.
Projections are clear that under the current financing and benefit structure, Social Security will only be able to meet its full legal obligations until 2033.
For the US to regain strength financially, The Federal government needs to be ruthless on policy and boundary-setting. Not only that, but for USD to gain further traction, we can expect interest rates to climb.
Keep up with more finance news here at the East County Gazette.
