A federal court has just issued a ruling that has direct implications for everyone relying on Social Security for retirement income, now or in the future. Sovereign Man reports:
Ever since the mid-1990s, police officers and fire fighters in the town of Cranston, Rhode Island had been promised state pension benefits upon retirement.
But, facing critical budget shortfalls over the last several years that the Rhode Island government called “fiscal peril,” the state legislature voted to unilaterally reduce public employees’ pension benefits.
Even more, these cuts were retroactive, i.e. they didn’t just apply to new employees.
The changes were applied across the board; workers who had spent their entire careers being promised certain retirement benefits ended up having their pensions cut as well.
. . .
Last week the First Circuit Court issued a final ruling and sided with the state of Rhode Island: the government has no obligation to honor its promises.
. . .
Social Security is in even WORSE condition that the State of Rhode Island’s perilous pension system ... According to the Board of Trustees for Social Security ... the Social Security trust funds “become depleted and unable to pay scheduled benefits in full on a timely basis in 2034.”
. . .
The First Circuit just showed us what the solution is: cutting benefits.
And now the government has legal precedent to do so.
They can retroactively slash whatever benefit they want in their sole discretion regardless of what legislation exists, or what promises have been made in the past.
There's more at the link.
The Sovereign Man report omits a very important detail. Social Security is already stiffing its recipients by using a deliberately falsified, wrongly calculated measurement of inflation, which is drastically understated in the official figures. This allows it to provide annual cost-of-living-related increases that are far below the actual increase in the cost of living, thereby cheating recipients out of money they really need.
Even with this deliberately minimized calculation of inflation, Social Security is running out of money. According to SS's own claims, it'll run out of reserves in sixteen years from now. It'll still have its current income, of course, but that won't be enough to pay out all claims if there are no reserves on which to draw. The solution is very likely to be what Sovereign Man posits: a reduction in benefits across the board.
If you were, or are, or expect to be, reliant on Social Security to fund your retirement, you need to make plans to supplement it from other sources. Now. If there are no other sources readily available, families are going to have to consider helping each other, with younger members assisting older ones financially and in other ways - just as our grandparents did when they retired. I remember my maternal grandfather and grandmother living with my parents until they died, in the early 1960's. There was no question about whether that was "fair" to my parents - it was simply necessary, so they did it without a second thought. That's how society functioned, back then. Perhaps we're headed that way again . . .