Social Security Running Out of Money & $247 Trillion Debt Bomb & Solutions in Comments
The $247 trillion global debt bomb– The Washington Post
“The untold story of the world economy – so far at least – is the potentially explosive interaction between the spreading trade war and the overhang of global debt, estimated at a staggering $247 trillion. That’s ‘trillion’ with a ‘t.’ The numbers are so large as to be almost incomprehensible. Households, businesses and governments borrow on the assumption that they will service their debts either by paying the principal and interest or by rolling over the debts into new loans. But this works only if incomes grow fast enough to make the debts bearable or to justify new loans. When those ingredients go missing, delinquencies, defaults and (at worse) panics follow….Since 2003, global debt has soared. As a share of the world economy (gross domestic product), the increase went from 248 percent of GDP to 318 percent. In the first quarter of 2018 alone, global debt rose by a huge $8 trillion. The figures include all major countries and most types of debt: consumer, business and government. But to service these debts requires rising incomes, while an expanding trade war threatens to squeeze incomes. The resort to more tariffs and trade restrictions will make it harder for borrowers to pay their debts. At best, this could slow the global economy. At worst, it could trigger another financial crisis.”
America’s Social Security system is going broke – here’s what to do before you retire – Business Insider
“We’ve spent a lot of time in our regular conversations talking about the looming retirement crisis around the world. The data is horrific. Pension and Social Security programs in nearly every developed nation are woefully underfunded. In the United States, senior government officials including the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services, have stated unequivocally that Social Security’s trust funds will run out of money in 2034. More importantly, there simply aren’t enough workers in the work force to sustain the program over the long-term. It’s something known as the ‘worker-to-retiree ratio’; essentially, Social Security requires a certain number of workers paying into the system for every retiree receiving benefits….Social Security tax in the US amounts to 12.4% of a worker’s salary. So when the financial burden of a single retiree’s benefits is paid by just 2.6 workers, the resulting tax revenue won’t be sufficient to pay benefits unless: 1) Taxes on those workers are dramatically increased, and/or 2) Benefits for retirees are slashed. It will probably be a combination of the two. Bottom line, the people who run this program are telling the entire world that Social Security will soon run out of money; and they’re publishing alarming statistics about the steep decline in the worker-to-retiree ratio.”
