“There is broke, and then there is ‘college broke’.” Ken Hutcherson
Because it was so few years since I had finished college, Ken’s insights quoted above on “being broke” certainly resonated with me. I honestly remember searching couches for change to do laundry.
I can’t help but consider the different variations of broke when I think about the many ongoing discussions about cities, states, and governments being broke. We hear about defaults and “technical defaults”. Greece has dominated headlines but the US Government is not doing a great job avoiding bad press either. Clearly the budgets of our local, state, and federal governments and more than a few of their peers overseas are in need of repair. But how broke are they and what does it mean.
Recently I saw some statistics from the trustees of the social security trust fund. On May 13th the trust fund backing the payment of Social Security Benefits announced the fund balance would be zero in 2036. Yet they explained that a zero trust fund “does not mean” that payment of social security benefits would also go to zero. Rather, benefits would need to be reduced to 77% of their originally promised levels through the year 2085. In terms of the magnitude of a possible fix, they explained further that a 1% increase in both employer and employee contributions via payroll tax would eliminate the problem and restore to 100% the promised benefits.
I confess I count myself among the many that assumed significant numbers of us may simply never see social security retirement income. I’m quite encouraged to learn that our “broke” Social Security may yet pay out over 75% of promised benefits even if no fixes are made. State and Federal budgets aside, I’d have to argue that perhaps social security, anyway, may not fit the definition of “college broke”.