Monday, March 29, 2010

Social Security budget concerns could fuel interest in precious metals

Consumers have more than one reason to take a look at dealer gold and other traditional safe haven investments.

This is because along with a rapidly growing national debt, the Social Security system is also expected to pay out more this year than it generates from taxes.

A report in the New York Times cited past government expectations that this would not happen until 2016, and suggested that much of this trend was due to the economic downturn, where more people at or near retirement age decided to start collecting their benefits instead of continuing to search for jobs.

The newspaper also quoted former Federal Reserve Chairman Alan Greenspan as saying that "the revenues of the trust fund will be tracking lower for a number of years" barring an increase in economic growth.

Looking ahead, the growing cost of Social Security and other federal entitlement programs is likely to continue contributing to the growth of the national debt, barring effective action by Congress. If such action is not taken in the coming years, it might make sense to set aside some investments in dealer gold.