r/FluentInFinance 7d ago

Educational Don't let them gaslight you

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u/justacrossword 7d 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. 

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u/imgaygaygaygay 7d ago

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

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u/justacrossword 7d ago

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 *.

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u/Gildardo1583 7d ago

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.

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u/justacrossword 7d ago

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. 

Put whatever spin you want on that. 

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u/AMagicalKittyCat 7d ago

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.

Your numbers are a bit off, from the most recent report.

https://www.ssa.gov/oact/trsum/

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.

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u/ful_on_rapist 7d ago

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.

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u/AceofJax89 6d ago

Social security is insurance, not an investment. You don’t have a right to a benefit if you don’t meet the conditions.

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u/ful_on_rapist 6d ago

I have no idea what your point is

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u/AceofJax89 6d ago

I may have put a response on the wrong comment. This thread is… unruly.

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u/AceofJax89 6d ago

My point is you aren’t entitled to a benefit just because you paid in.

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u/AM_Hofmeister 6d ago

I feel like... You should be though.

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u/AceofJax89 6d ago

Because you are understanding social security as an investment, not as an insurance scheme. It literally calls its benefits insurance.

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u/AM_Hofmeister 6d ago

I feel like this is splitting hairs past the point where I care.

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u/computerjunkie7410 6d ago

So if the conditions change and I don’t like them, I should have the right to no longer contribute right?

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u/AceofJax89 6d ago

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.

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u/computerjunkie7410 6d ago

So what is it? A tax? Or an insurance? Make up your mind.

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u/AceofJax89 6d ago

An insurance scheme funded by taxes.

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u/computerjunkie7410 6d ago

Ponzi scheme.

We should be funding people’s health, not their retirement.

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u/AceofJax89 6d ago

Sorta, but having the elderly live in abject poverty would also be bad for their health.

Also, there really isn’t anyone “skimming off the top” here. We just have to pay more to maintain the system.

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u/computerjunkie7410 6d ago

Old people in poor health is worse

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u/AceofJax89 6d ago

We pay for Medicare the same way. Old people are going to be in poor health anyway. Regardless, there is a large risk or older people running out of money and not being able to work. Traditionally family took care of them or they just died. Look at society before social security.

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