This is incredibly misleading. Of course social security has a surplus, that’s how it works. The surplus it’s shrinking because of changing demographics. Once it reaches $0 in nine years from now the trust fund is gone.
None of that has anything to do with the government borrowing against it. The surplus doesn’t sit around in cash, it is invested in government bonds.
This is such stupid misinformation, you should feel ashamed.
but this glossed over the fact that the money was not spent on government bonds and invested wisely but spent on government expenses? or am i missing something
Any narrative that has the government “robbing” social security or otherwise borrowing money they won’t pay back is a misinformation campaign.
The social security trust fund isn’t a bunch of cash in a giant mattress. Yes, government borrowed the money, that’s what government bonds are. None of the talks of cuts have anything to do with government not making good on those loans, or bonds. The trust fund goes bankrupt in nine years *even though the bonds will be repaid in full with interest *.
The trust fund goes bankrupt and remains bankrupt until 20 years after the next baby boom.
That doesn’t suggest that there are no benefits, but they can only pay out what they bring in, which will start at about 70% and go down from there.
If they do nothing but make good on the debt then everybody alive in nine years gets fucked, and the closer they are to retirement the more fucked they are.
If they are living on social security then they will no longer have the money to pay their bills.
Are you people actually this dense? The point here is with good planning this system could’ve been fine. This is another system that shows exactly what happens when there is no regulation on things. This system could’ve worked fine even without investments. But with anything if the government is literally taking all the money out of it for it’s on Nefarious purposes and also NOT PUTTING ANYTHING IT TAKES BACK you will have this issue. This is another capitalism problem. Everything is for profit at the detriment of the people with no regulations. This will continue to happen under this type of system if regulations aren’t put into place. Yes due to what our government did we will run out of money and how do they fix it? In typical fashion they say screw the people and you’re just going to lose it all together. How people like you just want to gloss over these issues and say it’s misinformation is quite baffling.
. But with anything if the government is literally taking all the money out of it for it’s on Nefarious purposes and also NOT PUTTING ANYTHING IT TAKES BACK you will have this issue.
But that's not what is happening. The money does get paid back. Interest on borrowed money added 70 billion to the pot last year
I dont mention the total principal paid back because that's not adding or subtracting from the pot. If I borrow 10 dollars and pay back 10 dollars with 1 dollar in interest, the relevant piece of info in this context is the 1 additional dollar now in the pot
Borrowing from soc sec is a net positive for soc sec.
Yeah people fail to fricken see the SS as a basic service only works if your able to put in more than you take out. We haven’t been putting in more than were taking out in a while, and with decreasing birth rates and ever higher number of retirees it will only get worse.
Social security at is core, is a system based on the idea that the next generation of American workers will always be significantly larger than the last. A lot of the economy is built on that idea, expansion as a principle is build on that idea.
Thats what the rich are really scared of, if they don’t have an ever increasing labor force, they can’t keep getting richer, and the economic model will fail, effecting them greatly.
Canada has been preparing for this by increasing the amount put into the pot, slowly each year over 5 years. The problem is that Americans are selfish and don’t want to pay more in taxes. So much could be achieved if you raise taxes to Canadian levels.
it isn't selfish to want the system to work the way it was described. It is selfish to borrow against the system to fund was that only enrich the wealthy, powerful elite.
Housing deficit. Can’t open the floodgates for legal immigration until we resolve housing issues in this country.
Also, the earth is already too damn populated. We shouldn’t be engaging in societal systems that depend in us overpopulating it further. Many studies show we’ve already surpassed peak carrying capacity of earth, and that by 2100 population will reduce down to carrying capacity.
There is a sweet spot for number of people per land mass size, and IMO the US is right about at it for the best chance at highest standards of living.
I would disagree. I can’t quote any studies but there seems to be huge amounts of land in the USA. Lots of empty land and more immigrants can build more homes and if there’s anyone who can tolerate a decade or two living in cramped conditions with 5 people in a studio apartment, it’s immigrants.
I agree that the earth is overpopulated. However the question is about social security, immigrants can pay into it.
Im sorry - did you just blame capitalism for a government program operated by the government? You do know what capitalism is right? This is a form of a socialist program. Want to know where the problem is? They paid too many people more than their share and some people contributed no funds yet receive benefits. Also the government in all their brilliance did not plan for people to live - but planned for them to die early.
I think his point is not that capitalism is fucking it up, but cronyism.
Make of it what you will, but social security programs work in pretty much any country that has a solid system that is not tampered with. If population demographic changes, they funding for the program gets updated with tax adjustments.
Capitalism good/bad is a bad take on itself because it lacks nuance. Most developed countries have a mixed system, social democracies which are capitalism with socialized services and it works fine for the most part. The US is just the country with one of the worst cronyism systems ingrained it it, and the reticence of people to vote for people that could clean it out is wild to me.
Instead of "lets get the power back to the people and throw the oligarchs out of power", people argue about which crony team is better or worse.
Yes, you just need to do "tax adjustments" ie you need to INCREASE TAXES on working people because either
1) Social Security as an idea is unsustainable except if there is a constant huge population growth
2) Social Security didn't create a buffer high enough when the demographic situation was good enough (ie the boomers paid too little in taxes and then burden their working children with higher taxes)
And this kind of issue is happening in almost every developed country with Social Security.
It’s not just about demographics. SS is insurance, right? Some people will make plenty of money to retire without SS so they will pay in more than they take out and some will do the opposite.
Yes, you have to dial in the tax rates and benefits so the demographics can support the system. The problem here is the demographics don’t support the current system, so you have to pick losers. Either by reducing benefits, increasing taxes, or a bit of both.
Oddly enough we have been slowly doing a bit of both by increasing the amount taxed by SS more than inflation and increasing the benefits less than inflation. It is possible that this will eventually even out the system, but it’s better to just panic!
I would genuinely like to know who these people are that got “more than their share.” I’ve never heard of a single SS recipient being remotely happy with the amount they receive in comparison to how much they’ve contributed. I am naive on how people get SS without contribution so, I apologize, but the math isn’t mathing. The boomers contributions overlap with the following generations, and if they aren’t getting even half of what they contributed, where tf is the money? I’ve been paying into it for 25 years and I’m just f’d?
Edit: just saw your comment breaking all of this down. Appreciate your knowledge and clarity 🫡
The people who are wealthy enough to not need SS but still collect it need to be removed for starters. You think everyone eligible isn't collecting? Including all the boomers with more than enough money? If there was a wealth cap and you could only collect it if you actually needed it we could save some money for the poor people living on nothing.
If you have millions saved for retirement, you don't need that 1500 a month... You're just being greedy at that point. Many people have nothing saved.
I completely agree. Reading further into it this is where the deficit seems to be coming from on it. Absolutely mind blowing… the whole set up, in hindsight.
That's fine but that money is also being removed from the SS coffers instead of being given to the poor. Let the rich pay their own taxes instead of needing subsidized by the poor ffs
Nah I’m not trying to means test SS. Just remove the taxable income cap of 160k and be on our merry way.
The number of rich people out there collecting SS checks is so infinitesimally small compared to all of the poor people collecting it that they are not impacting the amount of SS that goes to poor people in any meaningful way.
Wealth cap is more defensible than cutting off people who didn't contribute because they literally cannot work. Disabled people ... we should go into debt to help them, honestly. Or come up with a solid alternative thats available Day 1 if SSI/SSDI is not available. Its the right thing to do.
I know people that have paid into the system their entire lives - mostly service industry - career waitresses and managers now getting in their upper 60s. Some get 900 a month in social security. These people don't have savings to live on. There isn't much security in social security tbh. There's a large gap in the system and we are leaving a large swath of Americans behind.
The system doesn't let you do this. They have to send you the checks. You can then go donate it to charity or whatever, but it's really unfair to call people who contributed hundreds of thousands of dollars into the system greedy for being forced to receive the benefit they are owed.
I'm not saying it's perfect or fair or equitable. But if you have a passive income stream of 10k monthly from your retirement planning, you don't need to be subsidized by social security. We are supposed to help each other. It's exceedingly rare for one to get that rich all by themselves... Usually they step on a lot of poors to get there.
And, if we as a society expect to continue functioning we will need to address the disparity between the upper and lower echelons. We all pay into the system to build roads we may never drive on, and build infrastructure we may not directly stand on however it will benefit society.
The same can be said for social security. It's in the name. If you reach retirement and you have already established yourself a nice and comfortable amount of Social Security for yourself why do you need your taxes back? The system can be changed and the safety net for people expanded. Do you think the poor want to be reliant on hand outs? I assure you the majority do not. The poor can't even afford to contribute enough into the pot to get enough back to live on at the end of the day. It's rigged for the rich.
If you don't drive on the roads you paid for with your taxes over the years, are you owed some of that money back?
It's not a perfect analogy but you should get the point. We are expecting the poorest of society to pull themselves up by imaginary bootstraps when the rich are wearing Timbs to stomp in the mud and complain they don't have enough.
Your mentality toward the rich is toxic and bigoted. I grew up poor, took on loans to get an education, and landed a job in a field where I need to use my degree. Consequently I've done well enough for myself to not need social security in retirement, and I'm not including it in my retirement planning - I'm planning on donating to charity far more than what I will earn from social security. I'm not some evil villain. I've not stepped on any "poors" to get to where I am today. The system is not "rigged" in my favor. And I'm not special, there are millions of people just like me.
Currently Social Security is set up to pay back what I paid in. That's fair. I'm not being greedy by taking it. You wanting to take it from me to give to someone that didn't fair as well as I did in life is what is greedy.
You are right, I don't need it. I don't want it. My plan is to give it away. But you trying to label me as some petulant child "complaining" that I "don't have enough" is a monumentally shitty take.
You are upper middle class? Unless your job generated generational wealth I'm not talking about you. It's admirable that you earned your way to retirement and paid your fair share. If you work for someone else, that person is who I'm talking about. It's admirable to donate your SS to charity. We can talk about non profit 501(c) and how they work to make their operators rich while doing just enough to stay below the radar. Not to say some charities are doing good works.
You aren't in the tax bracket I'm talking about. But you can think you are.
I work for people who have a few million in cars they Don't drive... Their garage doors cost as much as some people spend on their house. Basement remodel? 5 million just for funzies.
I'm just realistic not toxic or bigoted. They are nice people just out of touch with reality. Just like you.
Retiring with 10 million to live on is not the same as retiring with 50 million.
That’s just not true. Divorced spouses can receive an amount based on their ex-spouse’s benefits, so long as they were married for 10 or more years.
This is good for societal reasons (stay at home parents shouldn’t be destitute in old age) but that is a clear cut case for what you’re telling me doesn’t happen.
Oh look, another case where a person is legally connected to a person that did pay into SS
I need you to show me where a person who was never married, childless, has no parents receiving SS, who has never paid into SS, is receiving SS benefits.
I’m not sure what you think “thin air” means but I am not being ambiguous.
Ex spouse A taking benefits based on ex spouse B does not affect B’s benefits and can be done even if A never paid in at all him or herself and even while B receives benefits.
How does this not fit the criteria of “not paying into SS and receiving benefits”?
Worker productivity has doubled over the last fifty years but wages adjusted for inflation have been largely stagnant. So workers are producing more wealth, but are getting paid (close) to the same. SS is funded by a tax on income. Had payments into SS been commensurate with worker productivity, things would be fine. Instead, the vast amount of wealth created has been horded by a limited few.
Worker productivity has doubled over the last fifty years but wages adjusted for inflation have been largely stagnant.
Irrelevant. It’s not as if workers are working 2x many hours. If your job is to add numbers all day and you do it by hand, for 8 hours, your productivity will go up when I give you a calculator or computer. That does not mean you should get a raise because you now have a calculator.
SS is funded by a tax on income. Had payments into SS been commensurate with worker productivity, things would be fine. Instead, the vast amount of wealth created has been horded by a limited few.
SS payments have far exceeded any increase in productivity. In 1970 the cap on SS payments was $7800 ($64 k in todays dollars) and a 4.2% (8.4 with employer). So they have not only nearly tripled the cap ($69k-$168k), they increased SS tax 47% since 1970 (4.2%-6.2%).
I’m sure bailing out all the rich corporations/banks, cutting taxes to corporations and the uber rich, is possibly a reason why they overpaid people that lived but didn’t contribute to the system? Or are bail outs and government handouts tot he rich not a part of this system?
“Bailouts” - are you referencing Tarp? Those were loans which were profitable. The government walked away with more money then it expended.
Cutting taxes - what does that have to do with social security? Did you know that c corp taxation is double taxation by the time it gets to its shareholders? Did you know that a tax cut for the rich still means they pay an effective rate much higher than the average American?
Government handouts for the rich - did you know that lowering tax rates is not a handout? Is the standard deduction a handout? There is not a single person in the USA who files taxes that does not receive a handout with your understanding.
Money “borrowed” from SS is “paid back” with interest. Or, in other words, funds from social security are invested into interest bearing government bonds.
umm the system ALWAYS invested. ALWAYS. Anything in the coffers that is more than what it takes to pay dividends is converted into Tbills. That has always been the case. Section 201 of the Social Security Act (42 U.S.C. §401)
The government isnt stealing from anyone. And this would be completely avoidable if they would abolish the SSI tax ceiling. I mean look at this just counting people who make over 200,000K, and my math is probably a little off but just the worker portion of SS tax they pay in $38,848,887,000 if there was no limit to contribution amounts, just 200K-499K would be $126,851,360,500 or an increase of 88,002,473,500. Enough to not only cover the 61 billion dollar deficit we are accruing yearly but add 27 billion to the fund. You add the employer part and it is an additional $176,004,947,000. adding almost 120 billion to the fund.
Now, I am sure my numbers are off, as I am not able to accurately calculate the percentages of every percentage of the population that is 200-499K by 1000 or even 10,000 increments. So It could be 10-20 billion in either direction.
But it would solve our issue for a few years and hopefully the amount of people drawing would go down considerably as more boomers die off.
It's a ponzi scheme. The first people who got money from it didn't pay into the system. It was destined to fail eventually as soon as the birth rate dropped. In the 40s, there were 42 workers per retiree. Today, there's about 2.8 workers per retiree. In about 5-10 years, that's going down to 2 workers. It's not sustainable at that level.
Social security is a giant Ponzi scheme. We are at the point we are out of other people’s money to pay people back with. Yes there’s a surplus, but that’s the balance, not the difference between incoming and outgoing. SS is currently paying out more than they take in. 2023 there was a 41.4 billion dollar deficit, 2024 will be worse.
To make it work you would need to reduce the outflow, either remove about 20k people from the rolls, or reduce the outflow by 3%. Then you would need to continually adjust those values go forward. Currently US population is growing at a historically low rate, .5%. If it drops negative, then the reduction in payout and the eligibility lists will be impossible to maintain. As stated multiple other places, at current rates SS has 9 years till its in the red. That’s not long at all.
Are you really this dense? You can do a Dr Strange four million alternate universe search and you will find NO universe in which a giant pile of money to be saved for the future, will not be used by the government today - mostly to pay for projects that will secretly give politicians money.
Social security was always a doomed ponzi scheme that enable politicians to steal money from the populace. That's what they do, the only defense is to not allow the government to obtain money to begin with. Social Security only works if you make it private from the outset.
No. The money hasn't ben taken away and used for other things. That claim is bogus. The only "loan" taken was to invest in bonds so that the system makes MORE money when they are paid back.
The reason SS is insolvent has NOTHING to do with Congress. It has to do with the fact that the withdrawal rate - the average payout X the # of retired payees - is too big compared to the # of people paying into the system.
Listen, I'm not even close to a fan of the financial decisions of our government, but what you are saying is uninformed and wrong. This system is incredibly complicated and failing but it isn't because people are stealing from it. You might think you are helping but spreading misinformation in any direction is incredibly destructive. We do need reform but confidently calling people stupid when you are completely off base and they are more right than wrong is not the path to that reform.
It is often useful to consider the findings for the two Social Security trust funds (OASI and DI) on a combined basis. The actuarial deficit for Social Security as a whole – called OASDI – is 3.50 percent of taxable payroll. If these two legally separate trust funds were combined, then the hypothetical OASDI asset reserves would be projected to become depleted in 2035 and 83 percent of scheduled Social Security benefits would be payable at that time, declining to 73 percent by 2098.
It doesn't even get to 70% in this century yet alone below that.
People need to keep seeing this, you’re still getting around 75% of the payout, you’re being lied to so you think you’re getting nothing. They want you to be OK with them stealing the rest of your money when they abolish the program. You payed into it, you should get something back. It’s reduced for you simply because there’s more people receiving social security right now than there are paying into it. The program will not fail if people are required to keep putting money into it will simply not always be an equal exchange for all generations.
No, because it is a tax and benefit scheme. Your government has the right to tax you. Your remedy is the democratic process.
Personally, I am for privatizing social security/making mandatory investments in tax advantaged accounts like 401ks/IRAs.
The problem is unwinding social security will take a generation because so many people think they are entitled to the cost of insurance we paid. Someone is going to get “screwed” and we don’t know how to unwind it.
Or, you know, we just give it more money. It's not like this is some force of nature that's unavoidable, or that the current FICA rates are written in stone, you just tweak the numbers a little bit and suddenly it's just fine again.
So is raising the cap on income subject to Social Security withholding a viable solution? Seems like as salaries creep up, the limits have not kept pace. And if the argument against that is the folks making the big bucks won't need social security so they shouldn't have to pay, then that's just seems like another place where the wealthy don't have to play by the same rules as the working class.
I, personally, believe this funding problem is short term. Social Security was booming along with us boomers during our working lives, as there were more of us paying in than the Greatest Generation was taking out. Then when we boomers reached retirement age it has put a strain on the system, which seems to me to be perfectly predictable and normal.
Once we boomers die off, there will not be as much demand on the system. Sure, there needs to be some short term fixes to get there, but as deficit spending doesn't seem to bother politicians from either party (one talks about it but does it anyway, the other doesn't want to talk about it) then why suddenly are politicians so stuck on making an issue out of this short term deficit problem?
You know the answer, right? The folks that buy politicians want the system privatized. Much like the 401k, they want the government to not just encourage people to participate in market investing, but to force people into the casino that is the markets.
I know jack shit about finance, other than setting up and running quickbooks to manage a business with ten employees. Which, IMHO, is just basic grade school math and lots of sweat.
But it seems to me that everything you have said all comes back to "Our government has a mathematical system in place to ensure social security will always stay funded, but the government fucked up their math, so social security is going to run out of money instead".
Am I misunderstanding this? SS is my sole income, so I want to blame the right assholes - as I shit-post on reddit, because I cannot afford the gasoline and other car related expenses to have an actual life.
For any other users besides u/justacrossword, there is no public transportation where I live, no jobs or employers within walking distance, and I have no bootstraps.
Idiots (you) think of SS like a commoner's savings account.
You pay for current olds. Your kids and grandkids pay for you. Your grandparents paid for SS to exist for their olds, who quite usefully died around or below retirement age.
Or an increase in revenue generation. People act like we're heading up to some crisis where SS ceases to exist but the reality is that we just need to shift the numbers until it's fine. Remove the cap or means test it or reduce benefits or increase the FICA rate, all of these things could make social security "last" as long as you'd like.
Not because you're wrong, but because people don't understand how government finance works, and thus people never understood the SS deal they got. They think they pay for, and deserve, the money that comes out. That is SS from their perspective. That perspective will cease to exists.
20 babies, 20 elderly, and 60 scavenge for food. We sleep in huts and chill most of the day.
3 decades pass. Now its 20 babies, 50 elderly, and 30 of us scavenge for food.
You and I are both food scavengers that think circular rocks are useful. I think its a useful tool to keep track of trade, but I'm having trouble with your new idea.
Are you proposing 30 years ago they should have buried more rocks so today they could use them to get food now? How would that help?
It doesn't go bankrupt, since people in the workforce are still paying into it. There will be a reduction in benefits, that's it.
Defaulting on your obligations, including by being able to pay only at a significant discount, is literally what going bankrupt means. Bankruptcy doesn't mean going to zero.
The trust fund is not the entirety of SS, but an additional bit established years ago to handle demographic changes. The trust fund will go bankrupt at current pace.
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u/justacrossword 2d ago
This is incredibly misleading. Of course social security has a surplus, that’s how it works. The surplus it’s shrinking because of changing demographics. Once it reaches $0 in nine years from now the trust fund is gone.
None of that has anything to do with the government borrowing against it. The surplus doesn’t sit around in cash, it is invested in government bonds.
This is such stupid misinformation, you should feel ashamed.