Replies

Fine, just give me my SS & Medicare taxes back with appropriate interest and inflation adjustment and I’ll take care of myself.

There isn't any money to give you (well, at least not much). Almost all of it was paid to beneficiaries almost as soon as it was collected from you. That's why it is correctly described as an income transfer program, or welfare.

There is a relatively small amount in the "trust fund". But, that's just the equivalent of US Treasury bonds. Redemption of those bonds comes out of the general fund.

Welfare my ass. I had that money stolen from for all my working life. Why is SS always being threatened with running out of money, but welfare never is?

The fact that you were forced to pay taxes doesn't make it anything but welfare. It was just given another name, so it could be sold to an unsuspecting public. Social Security is running out of money because it is actuarilly unsound: meaning that it doesn't have enough assets or prospective income to meet its obligations. A traditional pension fund in the same condition would put the administrators in jail.

It's that way because politicians have voted to give out more money than it can afford. Adding the the automatic cost of living adjustment back in the 70's was popular, but not sustainable. And in the 80's, the "intermediate" economic assumptions used to justify the tax increase were actually hopelessly optimistic. It's turned out that the "pessimistic" scenario is actually closer to the truth, but even some of those factors were too optimistic, thanks to the Democrat's Great Recession.

We are already paying more benefits than can be funded with tax receipts. So, we have started cashing in the trust fund -- several years earlier than planned. Under the law, when Social Security exhausts the trust fund (in 2033, or earlier), it will have to lower benefits to the point that can be funded with tax receipts. Currently, that's about 75% of the benefits provided by law.

So, you should plan for a 25% reduction in your expected Social Security benefits, starting about 2033. Or, they may decide to adjust the benefit formula and screw the upper middle income taxpayers even worse than they already are. Or, they may means test Social Security benefits, so that any income or assets from any other source will lower or eliminate your benefit. The only thing Congress has to do is enact a change in the law: you don't have any contractual right to benefits... period.

As I noted in my last posting: The 80's were our last opportunity to reform Social Security, relatively painlessly. Now, it's going to hurt either taxpayers or beneficiaries, or both. And every year we wait, it's going to hurt worse.

It's easy to jump up and scream any time someone like me points out the ugly truth about Social Security. But, unless enough people stand up and be the adults in the room and are willing to make the sacrifice necessary to rectify the mistakes of our parents and grandparent's generation, our children and grandchildren are going to suffer.... greatly.

Because Social Security applies to everyone, and costs a lot more than welfare. Because the money they collected from you is long gone. Because the original system was based on the idea that most people wouldn’t collect as much as they’d put in (average age of death was a lot lower). Because Social Security worked best when workers outnumbered recipients 5 to one or more; it’s down to less than three to one and will inevitably drop lower.

Social Security is, was, and always has been a kind of Ponzi Scheme, and like all Ponzi schemes, it will collapse when there are not enough people signing on. And losing the money you’ve paid into Social Security may be just the start of it. Europe is probably ten years ahead of us on that scale, and countries there are already seizing people’s private pension funds to make up their shortfall. The US government has tossed around the idea of seizing people’s 401Ks since 2010 (probably longer, but that’s the earliest public mention of it).