It has been sold as a retirement plan. That’s the purpose of those stupid little fliers the SSA sends out every year, showing your W-2 income/SS wages and projected benefits. They’re misleading people into thinking “I’ve worked and paid in X, and the SSA tells me that I will be getting at least Y in benefits if I retire at 62, and Z benefits if I wait until 65...” and so on. The government has promulgated this propaganda, and much of the public has bought it, hook line and sinker.
Since the funds are co-mingled via the holding of debt which funds the budget deficit, let’s quit worrying about the accounting charade of a “trust fund.” There is no lockbox, there is no segregated pool of “this” money vs. “that” money. It’s all one big slush fund which Congress has been pissing away for decades, but at a rate in the last 10 years which hastens all event horizons. Last year, the SSA started paying out more benefits than it was taking in receipts from payroll taxes. That event was supposed to first happen in 2017. Well, tomorrow is here now.
There is now a locked and loaded weapon pointed at our fiscal situation: The exploding amount of debt has been issued at the short end of the curve... and when interest rates go up (as they eventually must, when the Chinese and Japanese get tired of being paid negative real yields to buy our debt), the interest payments on the national debt are going to explode upwards - to $800B or more per year, if they only return to nominal levels by historic standards.
To your “if’s”
1. We would need to phase in an eligibility age increase very rapidly. When the age of 65 was first chosen, that was the MEDIAN life expectancy of an adult white male in the US. ie, half of males would be dead by the age of eligibility, so the only issue was survivor benefits for the man’s wife and minor children (if any).
We have a situation where life expectancies are going up rapidly thanks to medical advances, and the rise in SS eligibility age has to be increased 10 years right now to catch up to current male demographics. We can’t take decades to get to a point where one has to be 75 to collect SS - we need to be there in the next five years. That’s not going to happen.
2. OK, remove income caps. Trouble is, there’t just not that many people in the cohort above the current cap, and there are likely to be a lot fewer in the near future. While removing the cap is justifiable, it makes a very small dent in the problem, which is one of stagnating wages, declining labor force participation rates and a huge influx of deadbeats from other countries.
3. Benefits can be adjusted up/down, and the formulas have been messed with before. Heck, we’ve messed with the computation of CPI to get around the COLA increases - to our collective detriment. We’re lying to ourselves about the rate of consumer inflation, and have been for more than a decade to limit COLA increases in Social Security. This is like using a hammer to change your spark plugs - the wrong tool for the job.
On Medicare: Fully agree, but that’s a whole ‘nother discussion.
See #66, but basically this plan changes the nature of Social Security unless there are corresponding benefit adjustments. I don't want to scrap the whole thing, but this would build on the existing damage down to Social Security which began with the early 1980s compromise to tax Social Security benefits. That amounts to double taxation up to the point where benefits paid exceed contributions entered.
Even if the government had saved all of the Social Security receipts and invested them (but in what, T-bonds? It's still the same pool of money), it still wouldn't be enough to pay anything. These tweaks are putting lipstick on a pig. The program is still unsustainable and I'm opposed to these little tweaks that make it "sustainable" for another 20-25 years or whatever. The time to deal with it is now. Let people my age OUT of it. If there are going to be cuts, give them to current recipients as well. It's not fair to punish my generation (the under 35s) by pushing all of the cuts onto us.
I figure if we’re lucky we have at most 2 years to make drastic changes to reduce government spending, and the largest of these is health care and the interest on the debt. If we haven’t achieved anything by then, interest rates will increase and I see no way out from there.