The crunch, in fact, will hit earlier than that. Around 2009, the roughly $100 billion annual Social Security surpluses, a cash cushion Congress has been spending on other programs, will begin to shrink. By 2017, those surpluses will be gone for good.
Think of the trust fund kid who spends his parents' money on frivolous things until the fund eventually dries up. That's the prospect facing the federal government within about 15 years, when today's annual Social Security surplus will turn into a $100 billion annual deficit -- a $200 billion reversal.
To head off the problem, lawmakers should allow workers to start saving money in Social Security personal retirement accounts that they would own and control. This would let younger workers build a nest egg for their own retirement and wouldn't reduce the benefits already promised to Social Security recipients born before 1950.
Many predictions come with a caveat: Maybe they'll happen, maybe they won't. Hurricane season is like that. This year may bring another Katrina, or we may escape without a major storm making landfall. But one storm we know is coming is the shortfall in Social Security and Medicare. The only way to keep that story off the front pages in years to come is to fix the problems now. Time is running out.
Showdown in Jackson Hole: The Fed Challenged on its Own Turf in Wyoming by Group Likely to Finally Start Dismantling it | Rachel Alexander