A Frightening Phrase: "I'm Your Mother-in-Law. I Need a Place to Stay.

If Social Security is important to you at all, you should be paying attention to the cost of doing nothing.

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.

The problem for millennials isn't whether they will get Social Security benefits. The more immediate problem is whether their parents will get benefits. The Congressional Budget Office ("CBO") projects Social Security will pay depleted benefits in 2031. If so, every future retiree from now until eternity expects to outlive scheduled benefits.

CBO's projected imbalances are based on many economic uncertainties which may or may not come to pass. The one ingredient in this mess that we can measure with certainty is time. The Trustees Report says, "The unfunded obligation would have increased from $8.6 trillion to $9.1 trillion solely due to the change in the valuation period."

This is not economic uncertainty. It is the mathematical cost of time. 

Doing nothing means that we didn't change the revenue intake, benefit formula, age requirements, or the number of quarters to qualify. We let the system run while politicians talked. In the 14 seconds that it took candidate Obama to say, "Social Security is structurally sound," the system lost over $220,000 (even more if you count the time it took candidate Romney to agree).
       

Because the equation "discounts fewer years" and replaces the cost of 2012 with the cost of 2088, I know with mathematical certainty that time has added 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. But time is the one thing that we know for certain will make Social Security worse.