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Cheat Sheet Q&A - Scared about the future of Social Security:

Today’s entry:

There was an article by Andrew Biggs (former Deputy Commissioner of SSA) in the WSJ on 8/18 that quotes the CBO saying that the SS insolvency date over this administration’s tenure has been moved forward by 20 years. 

According to the article, CBO now implies that without an increase in contributions (or other meaningful legislation) the fund will be insolvent (“dry”) by 2030.  “CBO projects a 90% chance that Social Security’s trust fund will be exhausted by 2037.”  I’m not a fear monger but that scares the crap out of me and the generations that follow.  How many more trillions in QE and subsidies will this cost?? 

Bottom Line:  So I referred back to the article by Mr. Biggs in the WSJ for full context.  I found a mix of good information and non-constructive conjecture in the article.  The looming insolvency of Social Security is a big enough without misleading information.  Let’s go through current dates of import based on the latest CBO data:


  • 2016 – This is the first year that Social Security’s Disability fund is projected to begin to become insolvent


  • 2029-2030 – This is the first year that Medicare is projected to begin to become insolvent


  • 2033 – This is the first year that Social Security’s general fund is projected begin to become insolvent


Now with regard to the concept of insolvency.  Insolvency doesn’t mean that there isn’t any money to pay what’s due to those entitled to payments.  It means that there isn’t enough money to meet all of the obligations.  So without a change in the program legally, benefits would be paid out at a lower level across the board based on the amount of revenue available.  For example starting with 2033 here is an except from the CBO “Thereafter, tax income would be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2088.”

So in other words at the time of insolvency one might expect to receive 25% less than they had been promised.  As long as there are people paying Social Security taxes there would never be a time in which no benefits would be paid out.  So it’s a problem but not a complete immediate collapse. 

With regard to the Obama Administration’s record on Social Security.  Mr. Biggs flatly misstated the situation.  The CBO estimate for the insolvency of Social Security’s general fund when Obama took office was 2037.  So it’s not a good record as it has moved up by four years to 2033 but it’s not close to a 20 year acceleration. 

I hope that helps – even if it’s only slightly better news. 

If you have a topic or question you’d like me to address email me:

Audio Report:


Update on how many people cheated to get subsidies for ACA policies & how many polices their appear to be altogether: 


Bottom Line:  So in the curious case of ACA exchange based policies we may finally be getting to the root of just how many in-force policies actually exist & just how many of the subsidies were falsely obtained. 

Based on the info from the health insurance industry and tax record information coordinated by Jackson Hewitt, here are perhaps the final numbers:



  • 6.8 million in-force exchange originated policies


  • At least 2.2 million policies with falsely received Government subsidies



So if that holds it’s not the 8 million+ figure the administration trumpeted.  It’s not the 7 million required for stability but it’s also not the low end estimate of 6.2 million.  Now for the policies that falsely reported income…


Comparing tax records of those who obtained subsidies it was determined that about 2.2 million subsidies were based on under reported income.  It appears as though the average subsidy obtained falsely based upon underreported income was about $3200.  Now here’s the thing.  The IRS just might be able to help remedy this situation.  Those who are eligible for a subsidy also obtain Federal tax refunds…  The average tax refund for this past year for someone who obtained a subsidy falsely was $2800.  So…  If the IRS gets its act together in time for tax time 2015 for the 2014 year…  At a minimum they could confiscate the tax refund of these individuals and rather than getting a $2800 refund they’d get a $400 tax bill.  So…  I’m rooting for the IRS to get its act together regarding the ACA enforcement.


Audio Report:




Before your kids fork over money to the college bookstore...  Have you looked online?:


Bottom Line:  Colleges are very effective at branding and directing students to their huge revenue producing bookstore.  Before you buy those required course books from the college bookstore however, consider this… 


According to Consumer Reports, online booksellers routinely have lower prices on college textbooks – including used textbooks.  In their research consistently had the lowest average prices though others including Barnes & Noble occasionally had lower pricing on certain books.  The moral of the story is clear.  Before patronizing the college book store ensure you’ve priced the books online first.  It could literally save you hundreds per semester. 


Audio Report: 




The new gateway drug - E-Cigs - latest data from the CDC:


Bottom Line:  We all know that for decades Marijuana has been characterized as a “gateway drug” by Government agencies.  Well move over Mary J because something that’s legal and with little regulation is stealing the title. 


Based on 2013 information a record low 15.7% of all teens in school smoke.  However a new trend with E-Cigs could begin to reverse that figure.  According to the CDC:



  • 21.5% of school aged teens who don’t smoke say they’ll try a traditional cigarette within the next year


Of those who have tried an E-Cig:



  • 43.9% say they’ll try a traditional tobacco cigarette within the next year



So those who have sampled an E-Cig are more than twice as likely to smoke the traditional cigarettes than those who don’t.  If this holds it may be turn out that 2013 marked the bottom in teen smoking with a reversing trend of more smoking in the future as a result, in part, of the proliferation of E-Cigs & Vaping devices. 


Audio Report:




Targeted TV ads are one thing but the latest political TV ad targeting campaigns are just plain creepy:


Bottom Line:  So early this year I mentioned that most states (49 of 50 I believe – including Florida) allow third parties to purchase access to surface level personal information about citizens.  Among the info distributed…  Your political party and how often you vote.  Here’s how it’s being used. 

DirecTV & Dish Network have been selling targeted DVR based political ads.  Clearly its not possible for live TV ads to be altered based on your personal situation but on your DVR it is possible.  So if you have Dish or DirecTV and you’ve thought that the ads are seemingly a bit more specific to you than those on live TV – they probably are.  If you do what I do and just fast forward past the ads you wouldn’t notice but in any event it’s fairly creepy. 


Audio Report: