From USA Today:
WASHINGTON — Social Security's annual surplus nearly evaporated in 2009 for the first time in 25 years as the recession led hundreds of thousands of workers to retire or claim disability.
The impact of the recession is likely to hit the giant retirement system even harder this year and next. The Congressional Budget Office had projected it would operate in the red in 2010 and 2011, but a deeper economic slump could make those losses larger than anticipated.
"Things are a little bit worse than had been expected," says Stephen Goss, chief actuary for the Social Security Administration. "Clearly, we're going to be negative for a year or two."
Since 1984, Social Security has raked in more in payroll taxes than it has paid in benefits, accumulating a $2.5 trillion trust fund. But because the government uses the trust fund to pay for other programs, tax increases, spending cuts or new borrowing will be required to make up the difference between taxes collected and benefits owed.
VH: Social Security turns citizens into wards of the state with all of the implications that this imposes---like the raiding of funds for use in other government programs and being held hostage to the whims of the political class who will change eligibility requirements and benefit amounts when they deem necessary. Politicians that have and continue to push for entitlement programs like Social Security, always fail to mention the downsides to such programs.
Lastly, I continue to be amazed at the amount of times that the government actuaries tend to be wrong in their long term projections. You would think that the American public would be more cynical about their projections.