No they weren't paid to our collective parents and grandparents. The truth is much worse than that. They were diverted into the general funds of the US Treasury where they allowed the government to engage in various types of vote-buying schemes (welfare, section 8, etc.) which benefitted Democrat politicians at the expense of the working man's retirement. They funded the "war on poverty", which government employees won, much to the detriment of the general population.
The whole idea of SS purchasing US Treasury bonds is monumentally stupid. If the SS department had purchased French, British and German bonds, at least the French, Brits and Germans would be taking their citizens to pay for the benefits to our citizens. But then the government would not have been able to buy the loyalty of low information voters.
However, the problems with SS did not just crop up yesterday. I read about them in financial magazines ion the 1970s and 80s. Some of us heeded the warnings and saved and invested. SS was never intended as a full retirement package. Read the SS literature. It talks of a 3-legged stool: SS, pension and savings.
If a worker saves and invests he can use SS as it is intended -- a supplement to other income.
A relatively small portion was invested in the equivalent of US Treasury Bonds. It's now being paid back, with interest. It will be gone around 2034. If benefits hadn't been so generous the past the past 40 years, there would be more, and it wouldn't have been exhausted so soon.
Yes, it would have been US debt, but at least the debt would be to Americans, rather than the Chinese.
The whole idea of SS purchasing US Treasury bonds is monumentally stupid.
Until recently, US Treasury Bonds were considered the safest investment in the world. But, consider what would have happened if the SSA had invested it elsewhere. Congress would have never allowed them to decide where: It would have been crony capitalism at its worse, with trillions going to whoever made the right campaign contributions.
However, the problems with SS did not just crop up yesterday. I read about them in financial magazines ion the 1970s and 80s.
No, it's not new. The changes made in the 70's to increase benefits almost destroyed it. That's why there was a 50% tax increase that was accelerated in the 80's. As I pointed out earlier, they claimed to have "fixed" it, but the demographic and economic assumptions were laughably optimistic at the time. Predictably, they turned out to be monumentally wrong.
SS was never intended as a full retirement package. Read the SS literature.
You're preaching to the choir. But, the fact remains: the problem is beyond the point of being fixable without a lot of pain.
Without a massive tax increase, benefits WILL be cut in about 19 years. The only question is how the cut will be distributed.
I'm trying to tell people the truth, so they can plan for the inevitable, or at least not stand in the way when Congress finally realizes they can't put it off any longer.