The concept of a “Trust Fund” is laughable.
Fed.gov spent that money LOOONG ago. Present payments to SS recipients come from present SS taxpayers and the general Fed.gov budget.
If this happened anywhere else in the economy, it would be called a Ponzi scheme.
This is what I'm thinking. Current SS benefits are being paid by legal counterfeit money; that can be continued in the future.
Some may be concerned that politicians will be embarrassed when confronted by their false assurances but no politician I know ever gets really embarrassed; they know how to pivot to the next promise.
Nope. The SSTF contains interest bearing, non-market T- bills backed by the full faith and credit of the USG. SS has been running in the red for a number of years, I.e., benefits paid out exceed revenue collected. T-bills redeemed from the SSTF make up the shortfall.
When the SSTF is exhausted, by law, benefits must be reduced to the level of revenue, which is projected to be about a 20% cut.
Today’s workers pay for today’s retirees. In 1950 there were 16 workers for every retiree. Today, it is less than 3 and by 2030 it will be two. SS must be reformed by either decreasing enefits or raising taxes or some combination thereof.
SS has an actuarial problem. No one stole the money. When something similar happened in 1983, Reagan and Tip O’Neil struck a deal that included raising the retirement age, increasing the payroll tax, and forcing federal employees into the system.. The solution was supposed to last 75 years. Obviously, it hasn’t worked. People are living longer and COLA’s are increasing more than revenue and the ever rising salary cap that controls how much of one’s salary is subject to the FICA tax. 80% of Americans pay more in payroll taxes than in income tax.
The concept of a “Trust Fund” is laughable.
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That’s what I’ve always understood. SS goes right into the general fund like everything else and is spent. It’s not sitting in a bank somewhere collecting interest.