The Impact of Time on Social Security

The author says that the more time that goes by, the worse off financially the Social Security program becomes. He argues that politicians need to work on a fix before it’s too late.

The Congressional Budget Office (“CBO”) projected last year that Social Security will pay depleted benefits in 2031. If so, every future retiree from now until eternity expects to outlive scheduled benefits.

CBO’s projections depend upon many variables which include economic uncertainty. They are a best guess. There is only one variable that we can measure with certainty: Time. The cost of time is detailed on page 66 of the 2013 Trustees Report which says, “the unfunded obligation would have increased <from 8.6 trillion> to $9.1 trillion solely due to the change in the valuation period.”

During 2012, we did nothing, the cost of which was roughly $1 trillion. According to the trustees, the cost to maintain Social Security rose from 8.6 trillion in 2012 to 9.6 trillion in 2013. Basically, the system lost more money than it collected – in its entirety.

Another way to look at this dynamic is we lost more money not fixing Social Security than we spent on the entire military. If we diverted every penny that we spent on the military and education in 2012 to Social Security, the system would be slightly worse off financially at the end of 2012 than it was at the start.

Doing nothing means that we didn’t change the revenue intake, benefit formula, age requirements, COLAs, nor the number of quarters to qualify. We let the system run while politicians talked. In the 14 seconds that it took Obama to say, “Social Security is structurally sound“, the system lost $221,968.54 (more if you count the time it took Romney to agree).

Time is not uncertain. It is a mathematical cost in equations. Every year that goes by means that the equation “discounts fewer years” and replaces a low cost year with a high cost “outer” year. Because of the equations we know that Time will cost more in 2013 than it did in 2012.  So we know with mathematical certainty that Time will add more than $500 billion to the cost of Social Security in 2013 because of nothing being done.

Politicians will tell you that we have time to fix Social Security. Comically enough, time is the one thing that we know for certain will make Social Security worse.

The information is based on the 75 year-financing gap which is the less conservative estimate of unfunded obligations. It is the financed measure rather than the funded measure shortfall.

About the Author

Brenton Smith (A.K.A. Joe The Economist) writes nationally on the issue of Social Security reform with work appearing in Forbes,, MarketWatch,, and regional media like The Denver Post.