Mark D. Goldstein, CFP®
Certified Financial Planner
SAFE-Money Alliance

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Ugh! Not Good. The latest Social Security and Medicare Trustee's Report showed that the financial conditions of BOTH programs had significantly deteriorated... despite a nine-year expansion of our economy!

Hmm, so I'm scratching my head and wondering how that could happen... and then it hit me like a ton of bricks (sarcasm). What if the expansion is not real? Yeah, I know, I know. Yesterday, we set a record for the longest bull market in stock market history (3,453 days). But what if it was created by interest rate cuts, dirt-cheap credit, printing money and stock buy-backs... all of which have created massive amounts of debt that could never possibly be serviced?

And then I asked myself, what would happen to the worsening financial stability of Social Security and Medicare if we experience a serious downturn?


Math and Logic. There are currently 62 million Americans using Social Security and Medicare. By 2045, there will be 140 million Baby Boomers and Generation Xers eligible! Where the heck will we get the money?

And while we're at it, how 'bout all those defined benefit pension plans at every level of government... as well as public companies, corporations and unions? Aren't they all enormously underfunded?

For example, California's pensions are underfunded by close to a TRILLION dollars! Illinois (from where I escaped in 2014) will likely become the first state ever to file for bankruptcy! New York, New Jersey, Pennsylvania, Ohio... and even the GREAT state of TEXAS... are all facing incredible levels of unfunded pension liabilities (in addition to massive retiree health care costs).

America's S&P 500 companies owe current and future retirees a whopping $382 billion more than they've got set aside. General Electric is short by over $31 billion (GE's pension plan covers over 600,000 people!). Boeing has a $20 billion shortfall. General Motors, $18 billion; Lockheed Martin, $15 billion; AT&T, $14 billion; Exxon Mobile, $13 billion; etc; etc!!!

What do you suppose might happen when millions of Americans begin to realize that they probably won't receive all of their promised pension benefits? And what will happen to our economy when retirees don't have enough money to buy all the goods and services they need? Will they dramatically reduce their spending... and cause the next downturn?

What the ....?
There's a radically changing political and economic climate in our country, with Millennials (the largest age group in the history of America!)  expressing an incredible preference for a socialist economy over a capitalist economy! 

Here are just a couple of (financially devastating) ideas that are gaining traction among those misguided knuckleheads: 

1. Medicare-for-All. First of all, the cost is absurd. We're talking about an estimated $32 trillion over a 10-year period! Hmm, that's $3.2 trillion per year... 75% of the current total annual budget of the United States!

2. Universal Basic Income. The way I understand it, we would give a kind of "allowance" to every man, woman and child in America. So, pick a number. Let's say $10,000 for each of them. That's $10K each for roughly 330,000,000 Americans, totaling an additional $3.3 trillion per year... another 75% of the current total annual budget of the United States!

So, those two socialist ideas alone, taken together would total $6.5 trillion... which is 150% of our current annual budget... and 33% of our nation's $20 trillion GDP. Holy smokes! When did they stop teaching math in the public schools? This madness is impossible... it simply does NOT work! In fact, there has NEVER been a successful socialist economy in the history of the world. Period.

Remember, boys and girls, the government doesn't make anything. They are merely transfer agents... transferring assets from you to somebody else, after taking their cut.

Tick. Tick. Tick. There's still time to take control of the taxes you pay and the assets you get to keep (I'm thinking Roth IRA annuities and cash value life insurance).

Hey, don't say I didn't warn you.