The generic answer is yes, we should all be cognizant of the costs of these programs, how the government plans to continue paying for them and in what forms these programs will look like in the future. I do not think that the government would allow these programs to become insolvent to the point where the programs were no longer offered or in place. That would be political suicide. Instead, what we will see is a balance of moderate cuts in programs, increased payroll taxes for Social Security (both higher rates and higher bases on which the tax is assessed) and higher participant premiums for Medicare. I also believe that taxpayers will pay income taxes on a higher share of their Social Security income in the future. The government also will continue to shift costs to employers, medical providers and taxpayers.

We, as Americans, have had the very good fortune of strong entitlement programs over the years. However, given our current economic conditions, the solvency of these programs are definitely of concern. According to numbers published this year by the trustees of the Social Security Trust Fund, the fund will be bankrupt in the year 2041. While this does not mean it will collapse entirely, it does mean that they will only be able to pay about 75 percent of the promised benefits. The report also states that by the year 2017 the Social Security Administration would begin paying out more in benefits than it collects in revenue, and that by 2027 they will need to begin drawing from the principal in the trust funds or borrowing money to meet monthly obligations. The Medicare hospital insurance trust fund is in pretty bad shape as a consequence of increasing medical costs, an aging population making more people eligible for Medicare and lower-than-expected payroll increases meaning smaller payroll taxe revenue. Other federal programs face similar challenges. Many solutions have been proposed running the gamut from reduction of benefits to increasing taxes to privatizing certain programs. No one proposal by itself will solve the enormous issues ahead of us. It will take the coordinated and concerted effort of the leaders in both parties to draft programs that will work for us.

Not only should the elderly be worried, but everyone should be worried about the solvency of Social Security and other government programs. As we’ve seen over the past few weeks, the federal government has put its neck on the line for many of Wall Street’s problems. That, along with our increasing national debt and the continuing federal budget deficits, puts our country in even worse financial shape. One of the biggest structural problems with Social Security is that when it was designed, average life expectancy in the U.S. was about 65; today it is well over 80. Social Security was designed to collect payments from employees and employers through a payroll tax. Since the amount collected for today’s retirees was based on shorter life expectancies, there isn’t enough to pay for the fact that people are living much longer. Today’s workers are paying a higher share of the benefits of those in retirement and that is only going to get worse. In order to correct the problem, it most likely will be longer for today’s workers before they can start collecting payments, or they will simply have to take less benefits. Medical costs also continue to skyrocket and Medicare is costing the government more. We all are going to have to face the fact that we will be paying more for Medicare in the future. As far as military retirement and veteran’s benefits, our government simply has to step up and take care of those who defend our nation, we owe them that.

The key word in your question is “entitlement.” In many aspects we have become an entitlement society and that is the cause of many of our budgetary and financial woes, both current and pending. Must Social Security and Medicare be fixed? Absolutely. The two latest attempts to stimulate serious conversations about fixing Social Security over the past seven years were derailed by certain members of Congress and special interest groups. All those shenanigans did was delay the start of what must be openly and honestly debated, with the end result securing benefits for our seniors, while providing incentives and opportunities for younger Americans to save for themselves. The citizens of the United States should demand that government spending be reined in and “pork spending,” even if it is in their home district, be eliminated. People can continue to complain about government handouts and the lack of our self-reliance, or they can do something about it. I say less government and more individual responsibility and accountability. How about you?