The Social Security Administration was kind enough to send a statement that arrived in today’s mail. It listed my taxed earnings in every year since 1978 (33 years of paying in). If I continue to pay Social Security taxes until I’m aged 70, I’ll be entitled to collect $2,113 per month starting in the year 2033. That’s the good news.
The bad news came towards the end of the letter: “… by 2037, the Social Security Trust Fund will be exhausted …”
I’ve always been amused by that note from the SSA commissioner on the statement, under “About Social Security’s future…”
http://www.ssa.gov/mystatement/currentstatement.pdf
cuz he might as well just say “Social Security is fucked”!
Well technically there is no fund. Any social security payment goes straight to the Fed with an IOU given to the SSA. It’s just numbers on an excel spreadsheet.
Roosh,
It’s actually even worse than that. The SSA gets the social security portion of the FICA taxes, which then sends it to the Treasury! The Treasury, in return, provides bonds to the SSA. However, those bonds are not standard Notes, Bills, or Bonds, they’re of a special series that the Treasury issues ONLY to the SSA! So they actually have zero market value. The paper only exists to document a supposed future obligation that the Treasury department is liable for.
So, Social Security currently runs a surplus. They take that excess cash and buy these “special” bonds from the Treasury, who promptly spends that cash sending soldiers to die in Afghanistan, and running environmental impact studies. Once Social Security tips the balance and starts running a deficit, SSA will call up the Treasury and tell them they want to redeem some of those bonds, which, in theory, are redeemable at face value at any time. Suddenly the Treasury has to come up with more cash to pay the SSA, since they’ve just been spending the cash they’ve been getting from them. Then they have to issue lots more bonds to sell to the Fed (here’s where they’ll ultimately come in) to get the cash to pay the SSA, or raise taxes monumentally to make up the difference.
“Well technically there is no fund. Any social security payment goes straight to the Fed with an IOU given to the SSA. It’s just numbers on an excel spreadsheet.”
How is this any different than what the your bank does with your money that you keep there?
How is this any different than buying Treasury bonds?
Realistically, Social Security is a wealth redistribution plan that moves money from the young to the elderly. The “trust fund” doesn’t matter and really doesn’t exist. The taxes will simply be adjusted to the extent necessary to continue the redistribution. The only way at this point to not continue Social Security would be to eliminate democracy in America. With democracy in place, any halt to social security payments would last for, at most, 2-4 years until the elected leadership was replaced.
I just talked to a friend who spent 2 weeks in China. As you may know, the Chinese are very avid savers. He found out why: They have NO social security, none, zip, zero, nada and NO government provided health care so they have to save and plan for their future and possible health care needs. In other words, they need to take responsibility for themselves rather than rely on some benevolent big brother in Beijing to be there to provide for them. Isn’t that funny, that the “communist” country pushes self reliance and the “free” country pushes cradle to grave socialism. Perhaps our Big Brothers in Washington could learn something over there.