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Washington Post Staff Writer Lori Montgomery reported this on March 31, 2009:

"The U.S. recession is wreaking havoc on yet another front: the Social Security trust fund.

With unemployment rising, the payroll tax revenue that finances Social Security benefits for nearly 51 million retirees and other recipients is falling, according to a report from the Congressional Budget Office. As a result, the trust fund's annual surplus is forecast to all but vanish next year -- nearly a decade ahead of schedule -- and deprive the government of billions of dollars it had been counting on to help balance the nation's books.

While the new numbers will not affect payments to current Social Security recipients, experts say, the disappearing surplus could have considerable implications for the government's already grim financial situation.

The Treasury Department has for decades borrowed money from the Social Security trust fund to finance government operations. If it is no longer able to do so, it could be forced to borrow an additional $700 billion over the next decade from China, Japan and other investors. And at some point, perhaps as early as 2017, according to the CBO, the Treasury would have to start repaying the billions it has borrowed from the trust fund over the past 25 years, driving the nation further into debt or forcing Congress to raise taxes...."

You can read the grim details yourself at:

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/30/AR2009033003291.html

The last line of the article is a quote from Andrew Biggs, a resident scholar at the American Enterprise Institute:

"Instead of Social Security subsidizing the rest of the budget," he said, "the rest of the budget will have to subsidize Social Security."

The depletion of the Social Security Trust Fund (never mind the idea of Social Security being subsidized by the rest of the budget) is an absolute financial disaster in the making; one that will turn those "golden years" into a form of "cruel and unusual punishment."

And it's much closer than you think.

- Ed Smith, Publisher
The EHS Letter Manual