Posted: May 18, 200911:56 am Eastern© 2009 WorldNetDaily
Treasury Secretary Timothy Geithner announced that Medicare would run out of money in 2017 and Social Security would do the same in 2037, both sooner than previously projected.
Both are reaching a tipping point as federal government tax revenue slows dramatically, unemployment rates increase and program benefit payouts grow.
The U.S. Treasury, on a GAAP accounting basis, calculates the federal government had a $65.5 trillion negative net worth last year when the net present value of future Social Security and Medicare benefits are taken into consideration, a sum nearly identical to the annual gross domestic product, or GDP, of the world.
This puts increased pressure on older Americans who expect to benefit both from Medicare and Social Security benefits in their retirement years. Losses suffered in the economic recession have forced thousands of older workers back into the workforce. Labor Department statistics show participation in the labor force by workers over age 65 hit 16.9 percent in April, the highest for that month since 1971.
"Older workers have been besieged from many different angles during the current economic downturn," Corsi wrote.
He included the following examples:
Home values have lost more than 25 percent or more of peak 2006 value in most urban areas throughout the nation;
Mutual funds and 401(k) plans invested in mutual funds may have experienced losses of up to 50 percent in the past 18 months, depending upon the mix of mutual funds underlying the investment;
Pension funds face uncertain futures for companies that have gone out of business, with losses in pension and retirement health benefits uncertain for UAW workers in the restructured Chrysler and GM bankruptcies; and
Inflation hitting fixed-income retired seniors particularly hard, as living expenses appear on the increase with the price of oil once again topping $60 a barrel in last week's trading.
The Wall Street Journal reported a study conducted in April by the Employee Benefits Research Institute, based in Washington, D.C., showed 22 percent of workers nationwide said they were "not at all confident" that they would have enough savings for a comfortable retirement, surpassing the number who are "very confident" for the first time since the survey was taken, in 1993.
The Financial Times reported that before the recession about 15 percent of the 78 million baby boomers intended to work until they died, but now that has risen to more than 25 percent.
The U.S. Census Bureau projects that the 36.3 million people over age 65 in the U.S. in 2004 will swell to 86.7 million by the year 2050, a 147 percent increase in the 65-and-over population between 2000 and 2050.
By comparison, the Census Bureau projects the U.S. population as a whole will increase only 49 percent in the same period of time.
By 2050, those who are age 65-and-over will constitute 21 percent of the U.S. population.
The Census Bureau has also documented that the percentage of those 65-and-over who are still working nearly doubled between 1977 and 2007, as limited Social Security benefits and a diminished U.S. savings rate made retirement economically more difficult.
Still, the Census Bureau noted that the 65-and-over labor force participation rate had been at historic lows during the 1980s and early 1990s, before the recession which began at the end of the Clinton administration and the turbulent economic times that have hit the United States since the 9/11 terrorist attacks.