“As that gap (between revenue and payouts) gets bigger, the trust fund will be used faster. “says Alicia H. Munnell, the director of the center for retirement research at Boston College. She made this statement on account of the deep rooting problem of Social Security.
There have been total 26.4 million filings for the unemployment benefits in the last 5 weeks, that is actually the one sixth of the US labor force which stands at 165 million.
One-sixth people losing their jobs is troublesome for any economy. Extra Loss of jobs and shutting down of work due to the spread of the deadly coronavirus caused disease covid-19 is further adding on to the issue. The government is trying its best to balance both economy and health,but everytime there’s a choice to be made health and life obviously gets more emphasis over finances.
The social security is paying out more than it’s taking in and is now becoming shakier than ever. It was already dipping into the reserves but now it’s even faster.
The government trustees, last year, estimated that the Trust Fund will be extinguished in 2035. It is also said that only 76% scheduled benefits would be paid with the left over resources. It can also be said that a person should expect a lot less from the regular benefits.
In their latest forecast, the Trustees agreed that the analysis did not reflect the potential effects of covid -19 on the social security,due to the uncertainty it brings with it.
At the end of the crisis, there are only two ways to deal with the issue, and both are disastrous : Either cut the benefits or increase the taxes on workers. Both of them are not very desirable. However, if we do nothing the first option is assured and the clock is ticking even fast today.
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