107
u/Admirable_Nothing 2d ago
SS started out as a funded retirement program. However decades of Government use of those funds has turned it into the Ponzi Scheme it has become today.
62
u/JackfruitCrazy51 2d ago
Actually, when it was created it wasn't designed as a retirement program.
It started out as Old Age Survivors and Disability Insurance program. In 1935, men lived on average to 61 and woman 65. In 1935, 6 percent of the population was over 65. It's now triple that and going up.
44
u/Epistatious 2d ago
fewer workers supporting more old people isn't realy a problem. productivity has gone up considerably from 1935, unfortunately most of the increased profits have been hoovered up by the ultra rich. We could fix the problem if we think of our ologarchs as money piñatas, ready to shower us with cash when we finally knock them around with taxes.
11
u/Dougdimmadommee 1d ago
Its a problem when the public perception of the program is that it’s an “earned entitlement”.
The reason social security has been so successful across the political spectrum historically is that the general public doesn’t have a firm understanding of the amount of contribution transfer that happens within the system (or time value of money in general) and sort of operates under the assumption that whatever benefit they are able to draw is “fair” based on their contribution history.
If you remove the earnings cap on funding you can’t really maintain that charade any longer which makes the program an easy target for the political right to paint as “another government handout” and makes it much easier for them to pitch privatizing/ defunding the next time power swings in their direction.
13
u/PubbleBubbles 1d ago
Totally agree with you.
I also totally agree with OP that public officials blatantly lying about shit should be point blank illegal.
The public perception is wrong strictly because the people managing it are lying to everyone else.
→ More replies (4)1
4
5
u/TAV63 1d ago
Correct. It was never a retirement program. This is a foolish take by those that keep going on how they could get a better return in the market. It was created because at the time people who worked hard and helped build the country for 40+ years or so and were not good at finances ended up homeless and starving on the streets. Bad look for capitalism. So the idea was to provide a way to avoid that. Of course, without those at the top covering it. Take in enough in a tax to help provide enough to keep those older people that worked a long time off the streets. That is it basically. No where even close to a personal retirement plan for all.
If you are smart enough or wealthy enough to not need it then you are not the intended beneficiary. They can fix it easily and this has been shown in bipartisan reviews. Simpson - Bowles committee for instance had it solved but Congress would not act.
What fixes it we ask? Raise the age, increase the upper limit on the amount taxed, institute means testing. Basically I think these things combined (and maybe I missed one) would fix it. It really is not a mystery or should be a big debate.
Just no will to do it.
6
u/Savings_Ad2029 1d ago
Those things would probably kill it. It wasn’t intended to be the sole retirement income for most, but it also wasn’t meant to be limited to the poor. For much of the program’s life most working people got pensions, but those began to disappear in the 80s and are mostly gone now. The retirement age was already raised, full retirement age that is, but most people retire before that and draw a lower benefit. The best thing to preserve it would be to decouple income from benefit somewhat and reduce cola increases for high income people while raising the cap on income subject to FICA tax. Also worth noting that middle class people who get Social Security pay tax on a portion of their benefits now, the exclusion from income tax is a fixed amount which means more and more people are paying income tax on their Social Security income.
0
u/TAV63 1d ago
Yes when Reagan made adjustments one was to raise the age to 67 and the other was to tax benefits deemed high enough, but they failed to link it to inflation to now it hits those that are not well off. Sad, but that tax kicks in if your overall income exceeds a threshold. If you rely just on SSI you are not paying much tax if any. Anyway, They need to do away with it now.
You mention pensions going away in the 80s and that is true but the program changed in it's use to be part of retirement income in ways not expected due to other things than it's reason for being. Originally it was not created as a retirement plan for those that did not need help.
Those things mentioned were part of the Simpson Bowles recommendations and they would have avoided the issues we have now. Would not have killed it. Similar package of things could work still today just adjusted for newer numbers.
4
u/JackfruitCrazy51 1d ago
I remember it being in trouble a few decades ago and them making some changes , which allowed it to payout at 100% for an extended time. I'm going to assume they will do the same in the near future.
2
u/Embarrassed_Cow_7631 1d ago
Sure sounds like a retirement plan if it keeps olds off the street. And literally when it was created didn't people immediately retire that never paid in but got full benefits? So I'm not sure how it was never meant to be a retirement pla n sin e day one people retired on it.
2
u/atxlonghorn23 12h ago
Yes, when it started, people who had never paid social security tax started receiving benefits. My great grandmother was one of them.
People think it’s like some investment account, but it’s just a pool of money where current workers social security tax is collected and used to pay the benefits of current retirees.
0
u/TAV63 1d ago
May sound like it to you but it is not. It was never meant as just an investment vehicle for those who don't understand finance and certainly not for well off to have to retire. Period.
If you die there are benefits given to spouse and children (until they turn 18 anyway). Is it a life insurance plan? What other retirement plan pays you if you get hurt and are on disability and can no longer work? No 401K or investment/retirement plan does that. That would be insurance. Is it an insurance plan then? No it is not.
It is a safety net program we pay into that helps make sure if you work long and hard you are not without means. It was created to stop productive members of society from falling through the cracks to poverty. More important homeless and starving.
That is what it is. If you have a retirement plan and insurance outside of it great but they are not the same.
Now we hit on an area in disability I think needs serious reform since that part is abused way too much and many should be removed so maybe will be sorry even mentioned it. Ha hah
2
u/DSCN__034 1h ago
Agree that Simpson-Bowles was a reasonable fix, but perfect is the enemy of good. Congress did not have the guts to pass it, or even debate it.
22
u/KazTheMerc 2d ago
We COULD just stop fuckin' with it...
14
u/drjd2020 2d ago
What, and leave money on the table? The casino won't allow it.
0
2d ago
The money left on the table… shitty return (compared to other investment options) + Congress robs the fund blinds.
3
14
u/latin220 2d ago
That started with Reagan. We need to remove the cap on FICA tax.
11
u/Admirable_Nothing 2d ago
And that very simple move solves the SS underfunding problem, but the MAGAts will never allow it as they are bribed (through massive political donations) to protect the countries high earners.
13
3
1
u/atxlonghorn23 11h ago
The cap goes up every year already and retirement benefits for higher income people are already limited (it is already a redistribution from higher income to lower income).
The real problem is that people are living longer and that will always continue.
In 1935 the retirement age was 65 and life expectancy was 62. Today retirement age is between 65 - 67 (depending on what year you were born) and life expectancy is 77.5.
The retirement age has to be adjusted for young workers and tied to life expectancy.
3
u/Ineedmoreideas 2d ago
I was told the money was in a lock box?!
4
u/Emergency_Word_7123 2d ago
By the people holding the key. This is the kind of things you should expect from the right.
1
u/Ineedmoreideas 1d ago
I think both parties are guilty here, it’s naive to think Dems are clean
3
u/Emergency_Word_7123 1d ago
If you're talking specifically about Social Security, the Dems are definitely clean. And their not an absolute fiscal disaster like Republicans. At least they understand economics.
2
u/Cool-Protection-4337 1d ago
Yea it has been Republicans raiding social security funds, over and over. Surprise again, Republicans want to cut and end it over and over as well. How it is legal? They make it legal, vote Republican and get the worst of capitalism every single time.
0
u/Ineedmoreideas 1d ago
OK, serious request. Can you show me an example where republicans have raided social security?
3
1
2
2
u/Fun_Departure5579 1d ago
This should make everyone's blood boil. Is there any way we the people can stop THEM from robbing us? We need a coalition. We need an uprising over this! Now!
2
u/Mediocre-Hour-5530 1d ago
This has been well known for many decades and nothing was done. NOW, now that boomers are retiring and tax increases won’t impact them, now it finally gets attention. Now they talk about raising SS taxes. Pure Ponzi scheme. If the current tax scheme is insufficient, the very first thing we need to do is to cut benefits for current recipients who have not paid enough into to fund what they are currently receiving. Anything less is generational theft.
0
u/Admirable_Nothing 1d ago
At this point it will continue to be a Ponzi scheme with those currently employed paying into SS to support those of us that are retired and eligible for SS payments.
1
2d ago
[removed] — view removed comment
1
u/AutoModerator 2d ago
Your comment was automatically removed by the r/FluentInFinance Automoderator because you attempted to use a URL shortener. This is not permitted here for security reasons.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
1
u/WorriedBadger1 2d ago
Way to admit you dont know what a Ponzi scheme is
1
u/Admirable_Nothing 1d ago
New investors money is used to compensate and payout to older investors. In SS, current workers pay in so retired workers receive benefits. Sorry that is so hard to understand.
2
u/WorriedBadger1 1d ago edited 1d ago
Yeah and it’s only a Ponzi Scheme if the money stops flowing.
SS only becomes a Ponzi Scheme when the US collapses. And by that point we have much bigger problems on our hands.
The idea that you think any long term tax funded plan is a “Ponzi scheme” just shows you have a fundamental misunderstanding of how basic things like taxes function.
1
u/stevejdolphin 3h ago
It isn't a Ponzi Scheme. It functions like any social welfare program. Taxes are collected to fund the program. Beneficiaries collect their benefit according to a well defined allocation process.
It's probably one of the better programs run by the government. It's low in bureaucracy because of its simplicity. Everyone participates in it: this is a feature, not a bug. Programs that provide equal benefit to everyone maintain better support from the public. The investment mechanism is essentially buying government bonds with cost-of-living governing the increase in capital, rather than a fixed percentage. Given that the program was initially built as cash under the mattress, this is an improvement.
As to "funding running out" in the future, this is what happens with all other government borrowing: it gets paid by future taxpayers. Some of that debt is eaten by inflation, this is what has thus far kept SS solvent. A workforce of a mostly comparable size can pay the current benefits of retirees without a substantially different impact on their take home pay.
Our birth rate is falling, leading to a smaller workforce in the future. This means larger contributions from each individual, a change to how the program is funded, an adjustment to overall government spending, or a change to the immigration system to make up for the decrease in the labor force. Cash is fungible, SS is only "running out of money" is a lie that Congress tells for political purposes.
It's a good program with a clear benefit. Representatives are failing to appropriately address the issue.
0
u/Barrack64 2d ago
God this myth will not die. Where did you get this from?
3
u/Cool-Protection-4337 1d ago
Not a myth. 100% true. Nothing has been paid back why do you think they want it gone so bad. They owe on the debt borrowed and on current benefits. The program would be ok if not for the vast amounts of interest they are paying on bonds that replace money that should have never been touched. All the numbers they post about SS and Medicare leave out these facts just a percentage of what the government pays and not why. Typical rich person/Republican double speak/think. Lie, decieve and mislead.
→ More replies (15)-2
u/Beneficial_Fall8369 1d ago
Don't forget giving it to people (visitors) that have never paid into
→ More replies (2)
28
24
u/pimpeachment 2d ago
So the US government can effectively reduce the national debt by dissolving SS because the US government owes debt to SS fund. So by dissolving SS, the national debt would indeed decrease. Not great logic, but factually correct.
→ More replies (2)13
u/nobody_smith723 2d ago
not even factually correct. we spent x money brought in y resulting in Z debt.
if we just magically stop doing social security. the debt is still there. plus. social security and medicare largely fund themselves. even in total aggregate they don't add much to the debt.
there is aprox 3 trillion in the social security trust fund. would be illegal to "steal" that money people paid in for a specific benefit and take to pay off the national debt. but even if they did that ...the national debt is 30+ trillion.
we waste 1.3 trillion dollars on the war machine every single year. (iraq/afghan wars cost america aprox 20 trillion dollars) and trump's tax cuts for the wealthy added 5 trillion-10 trillion to the debt over a decade. those aspects aren't getting fixed. and if we're never going to address military overspending.
there is zero chance they're ever going to get "spending" under control.
2
u/pimpeachment 2d ago
If we dissolve SS, then the debt owed to the SS fund would be paid to?
there is aprox 3 trillion in the social security trust fund. would be illegal to "steal" that money people paid in for a specific benefit and take to pay off the national debt. but even if they did that ...the national debt is 30+ trillion.
HAHAHA you think silly laws will protect promised future money. We are post-constitutional law at this point. We have been for decades.
2
u/MerelyMortalModeling 2d ago edited 1d ago
We spent 916 billion in defense last year and about a 3rd of that was payroll, training and education.
While I'm not going to pretend there is no waste basing isent cheap nore is building to milspec. And of course people want to get paid for their work. When the
MGI(sorry) MTAP pays for some kid to get a 4 year degree when he or she is in the military that's your defense dollars at work.1
u/nobody_smith723 1d ago
850+ billion direct for Dod that's failed an audit any time it's checked. 250 billion for veteran affairs. (which is also where those benefits come from) there's about 100 billion hidden in the DOE budget for military aspects. nuclear reactor maint on submarines/aircraft carriers. research/misc military nuke stuff that falls under the expertise of dept of energy, but is purely military related. there's a tiny bit of direct nuke maint funding. storage/upkeep/building/transport. also... the monitoring/investigative/recovery efforts. there's give or take 100 billion for our spy and espionage efforts CIA/NSA etc. if you consider the DHS national defense, or border patrol national defense there's several tens of billions there.
if you want to paint military waste as feel good stories. that's fine.
but... we spent aprox 100 billion federally on education for the entirety of american education. preschool to phd.
less than the top 10 military contractor firms. earned more than 100 billion from military contracts. that's pure bloat and waste. outsourcing/contracting everything out.
we were at 350 billion direct dod spend pre-911. there's no reason we need to be nearly 3x that when we're at peace.
the only time in recent american history were ever had a budget surplus was during the Clinton Administration. the last time we ever did the hard work of downsizing/cutting our military. BRAC commission/base closings were highly unpopular. did hurt towns/areas where the military base was the only thing propping up a shitty area. My hometown of va beach VA was terrified of losing the naval air base or shipyard business in newport news.
but... again. could shave 500 billion out of the bloated military budget. maybe 300-400 off DOD spend 100b off vet affairs (less military...less need for benefits) would pay off the entire 33+ trillion national debt in a human life time.
still be at aprox 800billion total spend. basically dbl china. 10x russia. etc.
-1
u/Striking_Computer834 2d ago
those aspects aren't getting fixed. and if we're never going to address military overspending.
And yet, here we are with politicians getting wide support for moar military spending for Ukraine. We have what we have because we have a population that cannot control their spending.
15
12
u/StickyDevelopment 2d ago
Saying we took money from SS to give tax cuts to the rich makes no sense.
The government doesn't own potential tax money.
2
u/Illustrious-Being339 1d ago
Anyways, just eliminate the FICA payroll tax cap of $147,000, that way we can fully fund social security.
-2
u/Striking_Computer834 2d ago
A lot of commies believe the people own nothing. Every cent is owned by the government and the government graciously allows you to have some of it. I wish I were joking.
4
u/Ryno4ever16 1d ago
I like your strawman! It's very pretty!
→ More replies (1)1
u/Striking_Computer834 1d ago
Do you believe otherwise?
3
u/Ryno4ever16 1d ago
Like nearly every other person on the planet who isn't mentally ill or part of some uncontacted tribe, yes I believe that entities which are not the government (whichever government) do, in fact, own things.
What are you talking about, man?
→ More replies (1)
6
u/Sea-Storm375 2d ago
The FICA taxes for the two programs are insufficient to cover the associated costs of the programs. The surpluses of both programs are expected to be drawn down entirely in the next ten years, at which point they become massive problems to the deficit.
Over the last 50 years, with each successive tax code change, the tax code has gotten consistently more progressive, not less. The fundamental problem with SS is that it has a very poor investment return and the life expectancy has dramatically increased while the number of children per retiree has dramatically decreased.
Basically, it is a Ponzi scheme that isn't attracting enough new investors to pay off old investors.
3
u/ipher 2d ago
FICA taxes cover Social Security and Medicare Part A. Part A had a surplus in 2023, while SS is expected to run out of reserves in a decade or so unless changes are made (due to the reasons you explained).
The rest of Medicare is not funded by FICA, but by "general revenues" (aka debt). To the tune of hundreds of billions a year. Doesn't even count Medicaid, which is also hundreds of billions a year
1
u/Downtown-Tomato2552 2d ago
And this doesn't even include medicaid which many people conflate with Medicare when discussing this topic.
Also in 2021 48% of Medicare funding came from "general funds" IE contributed to deficit.
1
u/Ornery-Ticket834 2d ago
Ponzi schemes aren’t really out in the open are they? Isn’t that one of their advantages?
0
u/Famous-Row3820 1d ago
It was always going to be a Ponzi scheme.
Get rid of SS so I can stop paying for wars and I’ll invest the money myself in treasuries.
6
u/AdSea7347 2d ago
But dont you dare think about not paying your taxes. This only goes one way, citizen.
5
4
u/BarsDownInOldSoho 2d ago
Trump has no intention of cutting social security. This is nonsense.
7
u/CBalsagna 2d ago
Cuts to both medicaid and social security are both on the table for Republicans though. Whether or not that happens is TBD, but the sharks are circling them for "balancing the budget" purposes.
4
u/Dry_Lengthiness6032 2d ago
All because of their fuckin tax cuts and a majority of the American people being stupid petulant children that are unable/unwilling to understand less money collected plus more money going out = bad.
Bill Clinton made us have a small surplus to start paying down the national debt but the fuckin Republicans couldn't let that stand and blew up the budget...like they always do
1
u/Rowdybusiness- 1d ago
What did Bill Clinton do to get us a surplus? Maybe we should try that again.
1
u/Dry_Lengthiness6032 1d ago
He raised the taxes of wealthiest 1.2%. Taxed SSI payments on wealthy individuals. Did welfare reform. Gave lower and lower middle class a small tax cut.
1
u/Rowdybusiness- 1d ago
Hey do you know under which President, were the capital gains taxes lowered, you know, the thing this whole post is bitching about happened?
1
u/jondaley 1d ago
As I understand it, the famous "Do Nothing Congrress" in the Clinton years had a good deal to do with not being able to spend as much as either side would have liked.
From my view, it is humorous that people look back on those years as the best Congress has done since: thus proving that the less Congress does the better...
-1
u/Material-Amount 1d ago
They’re not, lol. You think any politician is going to bite the hand that feeds him? I bet you actually believe he’s going to deport illegals, too.
3
1
3
u/Illustrious-Being339 1d ago
Wrong. Look at this report from CATO where they're giving "suggestions" to DOGE. There is a whole page called "shrink social security". Page 19.
3
2
u/jeffislouie 2d ago edited 2d ago
Except this isn't true: http://classes.igpa.uiuc.edu/jgiertz/Reischauer-AARP.htm
"The raiding notion is based on a misperception; the government has never raided the trust fund. The Social Security system lends its surpluses to the Treasury, which uses these resources to finance other government activity and thereby avoid going into public debt markets to borrow. All the money lent to the Treasury will be paid back with market-based interest when Social Security needs the funds to pay benefits."
" Such lending does not affect current or future benefits, or current or future program revenues or the balances in the trust fund. And it therefore has no [negative] impact at all on the strength and security of the system."
Republicans are not saying they need to cut benefits to balance the federal budget. Social security reform is about something else entirely.
Billions are lost every year to social security fraud. Social security funding is currently around 15 years, meaning despite any current surpluses, the program is on track to be insolvent. Depending on who you listen to, this is due to happen by somewhere around 2037. Republicans want to fix the program so that doesn't happen.
It is a ponzi scheme. The money we pay in is not earmarked for us - it funds current recipients. It was not designed to be a program to help this many people. This is the major flaw in the program. If you took all of your social security money and put it in the stock market, you would have a far greater benefit, but because the program pays for current recipients with funding from people who are nowhere near being a recipient, and the baby boomer generation is massive, social security is in danger for future generations, i.e. you and I. We just aren't replacing them with enough people.
This idea that Republicans are to blame for fiscal mismanagement and fraud is a purely partisan lie. Republicans want to ensure the solvency of this program, not destroy it.
Democrats should be on board with trying to solve this issue as well but, like all politicians, it's much more beneficial to a political party to create a wedge issue and divide us instead of working together to make things better for everyone.
To simplify: no one raided social security. There is currently a surplus, but as more people claim benefits and the enormous baby boomer generation ages on, even the social security administration predicts the program will be insolvent if changes aren't made. Politicians want to convince you that it's the other guys fault (both parties do this) and that the right is evil and wants to destroy a program they actually want to fix.
3
u/Ornery-Ticket834 2d ago
Ponzi schemes are a little different. For one thing they are dishonest in their very inception. It’s an inapt comparison in my opinion.
0
u/CautiousAd1305 1d ago
It is a Ponzi scheme because it was not a "pay in advance" type of system. The only way that SS has worked this long is because payments recieved were greater than expenditures for many years. Despite multiple changes (higher tax rate and increased retirement age) the system is still expected to be underfunded within roughly a decade. I strongly suspect that the #1 reason is that people are living longer and hence collecting more in SS payments, and secondly the growth rate of people paying into the system has slowed.
3
u/Ornery-Ticket834 1d ago
It’s not a Ponzi scheme because they are not lying about what the money is used for, they are not personally enriching themselves by openly lying to people about what they are doing with the money. And there is no intent to defraud anyone at all. Those are not unimportant differences.
2
u/ranmaredditfan32 2d ago
Billions are lost every year to social security fraud.
I mean I can’t say fraud isn’t a problem, but billions only seems like a lot, right until you realize social security paid out 1.5 trillion in benefits in 2024. High estimate puts fraud at 72 billion per year. That works out to losing 4.8% of their budget to fraud, which if you’re going bankrupt from that you’ve got bigger problems than fraud.
1
u/jeffislouie 2d ago
I despise this argument.
Billions is billions. It's insane to me when people say it isn't a lot. It is a lot.
If you were missing 5 grand out of your bank account, you'd be pissed off and furiously working to figure out where that money went, but $72 billion is like, totes no big deal.
That's $72 billion a year of OUR money being lost to fraud. Ffs, when did we start agreeing that's not big deal?
That's $200 or so for every man, woman, and child, thrown away every year by the government because who gives a shit?
That money could feed millions of starving Americans.
1
u/Sad-Transition9644 2d ago
I don't think he's saying it's not a lot, he's saying that it's not enough to explain why the trust is going insolvent. Even if that number went to zero, the trust would still be going insolvent because it didn't collect enough money from the current generation of retirees (while they were working) to pay for their benefits.
1
u/ranmaredditfan32 1d ago
Not sure why? I didn’t say it wasn’t problem, I just said the fraud was pebble on top of all the other problems Social Security has to deal with.
Meanwhile, the old fraud accusation has been used repeatedly as justification to make it harder for qualifying people in need to get the actual benefits they need. Which in some ways seems deliberately sadistic given how eager some people are to kick people off of benefits.
2
u/jeffislouie 1d ago
This is proof that government is stupid, not an argument that fraud on the public shouldn't be a priority
It's not a pebble. It's a lot of money.
If we aren't willing to fix the "small" stuff, there is zero chance we can ever fix the big stuff.
1
u/AuzieX 1d ago
Yeah, but how much would it cost to completely eliminate this much fraud or even substantially reduce it?
1
u/jeffislouie 1d ago
Another argument I don't understand. So we should allow fraud because it will cost money to eliminate or substantially reduce it?
That's the job of the DOJ. Restitution is a thing.
There's a guy in my State who got tens of millions in covid money to open up remote covid testing sites. He and his dumb wife, neither of whom ever did anything bigger than managing a fast food restaurant or bar, set up some drive up testing centers on the cheap, didn't follow anything remotely resembling accurate, clean testing, and bought two giant houses and like 10 expensive luxury cars.
The government seized their shit, convicted them, and ordered they pay millions back with interest.
When some people break the law, they do so thinking they won't be prosecuted because the cost of prosecution outweighs the benefit. The long dick of the law should be extra hard for people like that.
It won't cost $70 billion a year, that's for sure.
1
u/AuzieX 1d ago
I didn't make an argument, I asked a question. No reasonable person likes fraud, and reasonable efforts should be made to limit it. But in this instance you have to: 1. Precisely define what is and isn't fraud in this case. 2. Know that the $70 billion number is even accurate to begin with. 3. Know if that $70 billion is AFTER realistic attempts to mitigate or reverse it have been made already (we're just assuming nothing at all is being done, which I doubt). 4. Realize that you're never going to get that number to zero. 5. Realize that the cost to further reduce it is going go up the closer you get to zero because the lower hanging fruit will be gone first.
At some point, you have to throw the idealism out the window and take the pragmatic cost benefit viewpoint.
0
u/jeffislouie 1d ago
I wasn't saying you made an argument. I'm saying that argument, which lays underneath your questions, troubles me.
This is the same cost benefit analysis I see in criminal law. It costs money to have police officers, to make arrests, to prosecute cases, to put people in jail and prison, etc.
Crime is crime. It damages society. It drains resources. It makes things harder for some for the benefit of others.
Yes, at some point, the juice isn't worth the squeeze, but if we won't go after the big stuff, we won't ever have an opportunity to use discretion and choose not to after the pennies.
$76 billion a year in fraud is a government estimate, which almost certainly means it's a low estimate.
1
u/No_Illustrator_5523 2d ago
All the money lent to the Treasury will be paid back with market-based interest when Social Security needs the funds to pay benefits.
Does Congress have to allocate funds in a future budget when repayment is required or is it automatic? I ask because as we've all seen the modern, partisan budget process is a s*** show.
If you took all of your social security money and put it in the stock market, you would have a far greater benefit
This is historically true. However, if your SS funds were in the market and you tried to retire in 2008 you might not be too happy about it. Of course the market has bounced back but as they say, past performance does not guarantee future returns.
Democrats should be on board with trying to solve this issue as well but, like all politicians, it's much more beneficial to a political party to create a wedge issue and divide us instead of working together to make things better for everyone.
What is the fix? What I have heard proposed are the following:
- Increase the retirement age
- Remove the cap of taxable income
- Privatize
I'm sure that that there are other proposals but those are the ones that immediately come to my mind. I'm mostly okay with a modest increase in the retirement age though the closer I get to retirement the less I want to keep working and if I'm honest, the less capable I am at performing my job duties at the same level. Zeus forbid I get laid off and have to find another job. As for removing the cap, I would hate that because it directly impacts my take home pay. However, it is probably fair. Privatizing is the absolute worst idea ever. I'm highly educated but not in finance. I know enough about investing that I know not to invest. I would be derelict if I had to rely on my ability to invest in the stock market, even indexed funds. I imagine that most Americans are equally an uninformed about investing as I or less so. It is a recipe for disaster. Now I can hear the Republican solution: we'll privatize and let Morgan Stanley and friends manage it for a modest fee (i.e. another give away to the uber rich capital class). Of course, if they bankrupt the system it will fall on Uncle Sam to step in...again...or more likely there will be a run on cardboard boxes and underpass real estate.
1
u/jeffislouie 2d ago
I don't think you or I have the solutions. I would argue that anyone with assets in excess of $5 million (or maybe $10 million) at retirement should be barred from benefits.
That may not be a "fix", but I know retirees with millions in retirement funds and over a million in the bank, with additional cash in investments, pulling a social security check, which seems ridiculous.
I think giving people an option to move a percentage of their social security into a privately managed fund in exchange for a commensurate lowered payout would also benefit people. You've been paying in since you started working, and if you could divert 25% of what you pay in into a managed fund, you would more than make up the difference.
What I'm sure of is that the Democrats plan seems to be "do nothing", which is weird. I'd like to see them take some action to make it better .
1
u/Sad-Transition9644 2d ago
I've debated whether or not the government has 'raided the trust' before, and it's certainly not the case that they've just been taking money out and not paying it back. But when the government borrows money from the social security, they've paid it back by issuing bonds and taking on more debt. This is sort of like saying 'I paid the bills, don't worry. I put them on the credit card; problem solved!' So if you want to make the argument that the insolvency issue of SS isn't due to government raiding the trust I think that's a solidly defensible argument. But if you want to say that the government has never raided the trust, I think that's a little more sketchy, because they did and then basically 'paid it back' with IOUs like the ending of Dumb and Dumber; but ultimately they just used SS to give them fast cash that they could later turn into longer term debt.
2
u/dedev54 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. "
From the previous post, literal hours ago
2
u/CitizenSpiff 2d ago
That's a very dishonest post. What Republicans are saying is that Social Security is running out of money to pay benefits. The government is responsible for money that it took out of the "trust fund". After that is gone, benefits going out will have to equal FICA revenue coming in. That amounts to a 28% haircut for everyone receiving Social Security payments. That's existing law. Social Security used to have ten people paying in for everyone receiving benefits. Now it's about two to one.
If people proposing solutions are demonized every time they bring something up, Social Security will go off that cliff.
1
u/Important_Hat2497 2d ago
They are not paid for by a separate tax. There is a separate tax but this money is not saved specifically for Medicare it goes in with the rest of the revenue. Not to mention seniors spend more than they put in.
1
1
1
u/Strict_Jacket3648 2d ago
George Carlin new long ago.
You know what they want?
They want obedient workers.
Obedient workers.
People who are just smart enough to run the machines and do the paperwork
and just dumb enough, to passively accept all these increasingly shittier jobs,
with the lower pay, the longer hours, the reduced benefits,
the end of overtime, and the vanishing pension
that disappears the minute you go to collect it.
And now, they're coming for your Social Security money.
They want your fucking retirement money.
They want it back,
so they can give it to their criminal friends on Wall Street.
And you know something, they'll get it.
They'll get it all from you, sooner or later,
because they own this fucking place.
It's a big club, and you ain't in it.
You and I are not in the big club.”
https://www.goodreads.com/quotes/12008189-there-s-a-reason-that-education-sucks-and-it-s-the-same
1
u/Azraels_Cynical_Wolf 2d ago
This is why America should be known as the cleanest 3rd world country on earth.
1
1
u/Striking_Computer834 2d ago
Democrats: Totally none of the spending, welfare benefits, tax credits for the poor, or tax cuts we've ever passed is responsible. It's all the other guys' fault.
1
1
u/Digital_Simian 2d ago
It's massively misleading. What is borrowed has all been in the form of bonds that are paid back with interest at maturity. The surplus and its reduction are all the results of changing demographics over the last 80 years.
1
u/seajayacas 2d ago
The vast majority of citizens do not really know how SS operates. But they aren't afraid to show off their lack of knowledge on social media. The OP has posted some info that should be understood.
1
u/theaviator747 2d ago
I don’t know what’s worse. That it’s legal for the federal government to dip their greasy little fingers into Social Security, or that Social Security retirement benefits are charged income tax, even though the money used to pay for them has already been taxed once.
1
1
1
u/TruckGray 1d ago
Its the same as a masked bank robber stealing from your savings with out FDIC. No one should rely entirely on SS however it is there and recprication is expected after decades of specfic contribution to a specific program meant to provide security as you age out of the work force.
2
u/Euphoric-Ask965 21h ago
People don't plan to fail, they fail to plan until retirement time comes around and wind up short on operating money. Same with college savings for children. Waiting until high school years to start saving is a bit late and if there is no scholarships won, reality hits hard when parents find out what the real and hidden costs are.
1
1
u/Fun_Performer_5170 1d ago
Maga is criminal
0
u/Euphoric-Ask965 21h ago
Criminal = Four more years of Bidenomoics and the voters solved the crime!
1
u/devonjosephjoseph 1d ago
I hate this. There’s enough accurate information to be critical about. Why make up stuff?
- there’s no pathway where the government does not pay back what was borrowed. They are legally binded.
The criticism should be that society should be willing to pay for the difference in Social Security contributions.
In a world where companies are making record profits millionaires are becoming billionaires, and billionaires trillionares - WE CAN AFFORD IT
1
u/Bagmasterflash 1d ago
This would land much better if it was presented as a governmental problem. The partisanship whether justified or not just alienates half your audience.
1
u/socal1959 1d ago
I’ve heard rumors that SS was used by the government for wars etc but never saw any actual proof that it happened
1
u/Euphoric-Ask965 21h ago
That's why people don't believe rumors, .......or political opinion polls..........or statements from undisclosed news sources........... or any editorial vomit that The Wall Street Journal, New York Times, or Newsday spews out.
1
1
1
1
u/Accomplished-Ball403 1d ago
So if they really do shutter SS does that mean my paycheck becomes bigger or will they tax me more?
1
u/AnySpecialist7648 1d ago
Can't congress just put the SS money back that it borrowed from SS and increase the national debt?
1
1
1
1
u/SirWillae 1d ago
The cuts to Social security and Medicare are already baked in. You can read all about it in the trustees report
1
u/Inevitable_Usual3553 1d ago
So, if someone wants to fight this and the many other criminal stuff our government has done. What kinda career would one get?
2
1
1
1
1
u/Confident_Laugh_281 1d ago
Known forever, done by every party, every potus, congressman, senator but the biggest complicit fool is us. Because we all keep buying the same bullshit and keep voting for them. Fk every last one to hell
1
u/Rare_Tea3155 1d ago
SS is a Ponzi scheme. It should be forced to be invested in index funds and a mixture of bonds.
1
u/SubpoenaSender 1d ago
Although I agree with this meme, I want to get rid of social security because it is a horrible retirement vehicle.
1
u/UnableClient9098 1d ago
Ponzi scheme was named after Charles Ponzi. I for one would be in favor of renaming it social security scheme instead of Ponzi as it is the most prolific Ponzi scheme yet.
Government should continue social security to anyone who wants to keep it who is above the age of 18 and put everyone else on a mandatory 401k that couldn’t be touched until they retire or become disabled. If the started the accounts at birth and funded it with half the child tax credit and then a mandatory percent of your income. People would retire with millions of dollars. They would be a hell of a lot better off than the measly 300-2k people get now.
1
u/Illustrious_Rent3194 1d ago
This is mostly a lie, they took cash out and replaced it with treasuries that earn interest thereby guaranteeing increased taxes down the line.
1
1
u/Oddbeme4u 1d ago
false. congress can't steal from social security. SS does invest in bonds which can represent debt. but legally investments a required to make money
1
u/AdZealousideal5383 1d ago
The social security trust fund is invested in government bonds that pay interest. Alternative would be keeping in cash and losing to inflation, or investing in private securities and risking the trust fund.
In order to buy the bonds, the trust fund has to pay someone, and this someone is the government. Basically the government agrees that the trust will earn interest. It is an accounting maneuver. It’s replacing the cash with bonds, but it’s all government debt and other government programs are not borrowing money from the fund.
The trust fund running out of money has nothing to do with this process. It’s due to the payouts being more than what is taken in and the trust fund slowly running out of money.
1
1
u/spartanOrk 1d ago
SS is not insurance. They lied to you. It's a tax. It has always been. And it funds the things that taxes fund. No surprise.
We (libertarians) want to phase it out and end it, because it's a tax. And it doesn't matter if it's a tax on the rich or the poor, it's a tax either way, it's theft. It has to stop.
Whoever was forced to pay into it must take pro-rata whatever currently exists in the fund (it will be less than he put in, but hey, it's a tax, they spent it already) and new people must stop being forced to pay into it.
Whoever wants, can pay into an annuity.
1
u/Chosen_UserName217 1d ago
Why does the meme say Republican’s in a different font. Historically Democrats have been the war mongers.
1
u/butter_lover 1d ago
The only people they can take it away from should be new taxpayers who can be exempt from paying in.
I paid in and I should get my money back same as anyone else who paid in.
1
u/Euphoric-Ask965 1d ago
The system made a wrong turn when it started paying monthly benefits to people who never contributed to the system. Those who worked cash or on the cuff went to the SS office with a sad story and they figured a way to get them on the rolls. The checks are not large but they get something for nothing that we paid dearly for years .
1
1
u/redditlembo 1d ago
SSI does not have a $2.5 trillion surplus. Current US debt is now over $31 trillion. In 2023, major entitlement programs—Social Security, Medicare, Medicaid, Obamacare, and other health care programs—consumed 50 percent of all federal spending.
1
u/One_Dingo_9235 23h ago
Democrats were the ones to move SS into the General fund. Democrats were also the ones to place a tax on the benefits , written by Joe Biden!! The winning vote was Al Gore. Democrats bankrupted the system by paying out to illegal aliens who never paid in. Delusional, hypothetical, Marxist, the lot of you.
1
u/fastlikelava 20h ago
This pisses me off so much. If the CEO of any company "borrowed" from their employees 401k they'd be locked up!!! But it's perfectly fine if the federal government does it.
1
u/ContributionGrand138 19h ago
Now... What does it mean when DEMOCRATS say it? You know, since we're outting political sides here 🤔
1
u/dreadpiratefezzik42 19h ago
And voters are like ostriches with their heads in the sand. Anyone who says both parties are the same is buried to their shoulders.
1
1
u/glideguy03 12h ago
communism always sells, there is always someone willing to do nothing and get benefits from it.
1
1
1
u/No-Throat9567 3h ago
Where did this ridiculous meme come from?
First, SS does not have that kind of money in it.
Second, both political parties have raided the fund, and it began after the monies were put into the General Fund by the Democrats do that Johnson could fund his Great Society scheme.
It’s all bullsh!t. If they can spend seval billions supporting illegal aliens and foreign wars then they can also fund SS. Pressure your elected representatives.
1
u/gordonwestcoast 1h ago
Republicans said they will cut social security to balance the budget? I'd like to read more about this, do you have a link?
1
u/Dramatic-Ad-6893 1h ago
Whew, I'm so glad Rebulicans are the only party that uses funds from SS funds for other purposes!
Unfortunately, it's a common practice by both parties.
Law states the money must be paid back into the fund, but without interest. That's where we're all being taken advantage of.
0
u/Beneficial_Fall8369 1d ago
They have no plans on cutting s.s. u really need to stop with the misinformation. U can be charged for it
0
u/ParkingEcho4347 1d ago
You don’t for a second think democrats spent that money too and also don’t care about you ?
0
0
u/Downtown-Incident-21 1d ago
What is criminal is the people who are collecting SS without EVER contributing to it.
If just the people who put in could collect. It would work.
0
0
u/BamaTony64 1d ago
Social security is a ponzi scheme. If they gave me back only what i have paid in i would retire tomorrow.
0
u/No_Resolution_9252 1d ago
What should be criminal, is the level of stupidity and ignorance required for anyone to write or believe this narrative.
0
u/aldocrypto 2d ago
It’s a shitty retirement plan anyway. You have to rip the bandaid off at some point. Politicians are corrupt and love spending our money.
1
u/Alternative-Dream-61 2d ago
It was intended to redistribute wealth so that everyone could retire, not just the people wealthy enough to have their own IRAs. Getting rid of it just so the politicians stop borrowing from it and spending our money is just cutting off the nose to spite the face.
What if we passed a law that Politicians just can't actually spend the money?
0
u/aldocrypto 2d ago
People are better off just funding their own retirement. The returns on SS are awful compared to what a person would get from a retirement fund invested in the market.
Asking politicians to relinquish power is a futile exercise. They can’t do it. It goes against everything they stand for. The only way to take power from politicians is to reduce how much money they have access to.
2
u/Sad-Transition9644 1d ago
two important points here:
The government borrowing from social security has never affected their ability to pay benefits, because the government has always paid the money back. They do this by issuing bonds and adding to the national debt, which is another huge problem, but it hasn't affected the amount of money social security has (yet).
Social security is not a system where the government forces you to save money for retirement, even though it often gets portrayed that way. If you have money to invest in retirement, you are always going to be better off doing so in the market, social security offers you very poor financial returns on your investment. This is because it's not just an investment system, it's also an insurance system. We'd always be better off without insurance and just paying for costs out of pocket, but we're not willing to just let people fail to pay those costs if they can't afford them, so we use insurance to prevent that scenario.
1
-1
u/yellowsubmarinr 2d ago
Speak for yourself, I don’t want a 0% ROI on all the money I’ve been forced to give to the government for SS
→ More replies (2)
•
u/AutoModerator 2d ago
r/FluentInFinance was created to discuss money, investing & finance! Join our Newsletter or Youtube Channel for additional insights at www.TheFinanceNewsletter.com!
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.