It is hard to imagine that anyone inside the DC beltway is not feeling a rising sense of panic over the news that Social Security is out of money. As the New York Times graphic shows, Social Security revenues were expected to exceed receipts through 2016, but in fact are expected to be less than receipts from 2010 on.
The year 2016 is comfortably far enough away that elected officials whose terms are no longer than six years don’t bother worrying about it. But if social security is out of money now, then the entire federal edifice — much of which has been funded by borrowing from the social security surplus — is on the brink of collapse.
The NYT graphic shows that revenues exceeded receipts in 2009 and are expected to slightly edge receipts in 2014 and 2015, but that’s deceptive. The Social Security Administration counts among its revenues the interest it collects on Treasury securities. Not counting that interest, the fund lost money in 2009 and is likely to do so in 2014 and 2015. But who pays that interest? Taxpayers.
Even more deceptive is the comforting claim by a Social Security Administration official that the agency has a $2.5 trillion “balance” to fall back on. That money is also in the form of Treasury securities, which means Congress spent it and gave Social Security an IOU. Who is ultimately responsible for paying that IOU? Taxpayers.
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This wouldn’t be a problem if Congress had invested surplus social security revenues in activities that actually produced a return. But the idea that government programs should cover their own expenses or even earn a profit has been long forgotten inside the Beltway. Agencies like the Forest Service and Bureau of Public Roads both once covered their own costs out of user fees, but no one expects them to today.
Meanwhile, Congress has added to the IOUs with health care reform and high-speed rail, both of which will cost hundreds of billions of dollars if they are not stopped. Will Congress recognize the beginning of social security deficits as a canary in the mine, or will the federal government just keep on spending like there is no tomorrow?
Speaking of rail, another agency that is going broke is CalTrains, which says it will soon have to cut its service in half if it doesn’t get an injection of funds from the federal or state governments. (In case that link expires, you can read a shorter version on Yahoo’s Bay Area Transportation News group, which also reprints articles about financial mismanagement at BART, VTA, and other California transit agencies.)
California is a classic example of the problem with government funding of things like transit and intercity rail, which is that elected officials like to fund ribbons, not brooms (i.e., new projects, not maintenance). So while California politicians go gaga over high-speed rail, transit agencies like CalTrains and VTA are cutting services. This is just one more reason why transportation should be funded out of user fees, not tax dollars.
The Antiplanner wrote:
> The year 2016 is comfortably far enough away that elected
> officials whose terms are no longer than six years don’t
> bother worrying about it. But if social security is out of
> money now, then the entire federal edifice — much of which
> has been funded by borrowing from the social security
> surplus — is on the brink of collapse.
[Emphasis added above]
We have similar problems when it comes to planning for (sorry) or maybe I should say budgeting for future maintenance or expansion or improvement of all sorts of infrastructure, be it newly-built or something that has been in place for many years.
This should be less of a problem with large and expensive assets owned by the private sector, since they are supposed to depreciate capital assets as they are used up, something that most government entities fail to do.
since they are supposed to depreciate capital assets as they are used up, something that most government entities fail to do.
That would explain all that GASB34 work done a couple years ago to meet the federal deadline for reporting capital assets. That is: you want grants, loans, bonds, you are current on GASB34. So most government entities in fact do depreciate their capital assets.
Nonetheless, the solution for the problem Randal linked to (you can’t link to a Java pop-up, thx for fixing) is obvious: more tax cuts, start a war, then do a head fake with something unrelated – like, say, immy-grints.
DS
Oh look, it’s Dan chiming in with his charming brand of snark and bringing out the strawmen…
Do you really think you’re funny with your little wisecracks Dan?
Don’t make fun of Dan. He can’t help that he was born stupid.
(Also it counts as troll feeding, which is why they come back. Same reason you only feed pigeons in the park – nobody wants **** all over their porch.)
Well you guys give hims so much bird feed. The difference is, Dan talks about the post, snarky or not. Y’all talk about Dan with no mention of the post. Way to join the big kid conversation… Not!
As for that conversation, I totally agree with Mr. O’Toole in the sense that political will is going to cut you with both edges. It seems to be a tragic folly in our system, that the leaders that reached the really tough conclusions don’t get reelected, probably because they were focusing on the task at hand and not getting reelected. It’s a truly sick game.
I wonder how the LA Metrolink is doing.
It’s ridership is almost 10% lower than Caltrain, but among 7 lines on 6x the trackage.
Why are costs so high?
Unions.
Gas.
Gov bureaucracy.
Rail cars run predominantly empty in one direction. (True for any line to CBD)
But that’s okay. Don’t charge full cost for the ticket price.
Make others (all) pay, to benefit 0.6% of the population.
The drivers chose to pay. They supported tax measures that fund public transportation, including the most recent, Measure R. Clearly drivers see some benefit in public transportation.
Localities seem to be for transit, which is okay right, because they voted to fund it? On a state level, California seems content to neglect transit. I guess it evens out then.
If the state starves transit and it shuts down, everything’s great in your world, right?
It’s just for voters to obligate all for taxes that are for ~10%?
The problem is that roads are neglected & gas taxes are not being raised to pay for more road expansion & maintenance.
Here in the Bay Area, the MTC is the umbrella MPO that decides where transportation $ go. About 2/3 go to public transit, when <10% ride.
Whacked priorities. There's hardly been any increase in freeway lane-miles for over a decade, while pop has increased 10%+; public transit routes have increased though, while ridership has not. That's true for many UAs.
What agency decides by you? The LA MTA or SOCOG (guess).
Here, the ABAG (was called BACOG) doesn't have much power.
More than 10% ride in the Bay Area during the rush hour commute. That’s where transit works its magic.
Of course car trips are going to have a greater share, though, especially when you have to get in your car just to run simple errands.
It sure would be nice to get on the bus or rail with a bag or cart on wheels to go shopping.
Sure, 11% ridership is magical. What a good investment for 2/3 of transportation $.
Spokker said: If the state starves transit and shuts it down, everything’s great in your world, right?
THWM: Scott doesn’t care about society or that other people exist.
Scott’s sole objective is to be a hypocritical asshole.
highman, How do think I’m an asshole & hypocritical?
Just because I prove you wrong all of the time, you don’t have to get mad & into kiddie name-calling.
Let me answer how you fit your labels.
You want drivers to make up the ~20% gap in user financing for roads, which 80% drive on.
While you want all people to pay for 2/3+ of public transit that <4% use.
You don't support your claims/assertions & don't answer any challenges.
You don't try to be civil or engage in discussion.
If you want to get to personal labels, additionally, you are a coward & not very bright & unable to apply logic.
Well Spokker, he just proved my point, Scott’s a sociopath.
I’d guess that both of you suffer from some kind of serious mental deformity that causes you to spend too much time on the Internet.
“It sure would be nice to get on the bus or rail with a bag or cart on wheels to go shopping.”
It wouldn’t be necessary as I live across the street from a grocery store. Now if only I could use the crosswalk without being hit by a driver. 40 MPH speed limits, drivers on their cell phones, exhaust fumes, that can’t be utopia…