AMAC, the free market alternative to the AARP, published an article recently summarizing the outlook for Social Security. The Democrats want to increase payouts, Trump doesn’t want to touch it.
All of the “trust fund” is invested in government securities. So, as I paid in over the last 50 years the government put an obligation on it books to pay me at 66, $X per year. To fund that expected level of payout they bought government securities, bonds.
I am now 69 and have been drawing for three years. Where does the treasury get the money? It sells the bonds it bought as I aged and paid in funds. The government then gives the SSA the money. But there is less money coming into the SSA then they pay out (since 2010), so the government must then sell new bonds in order to pay SSA.
What exactly did Congress do with the money I paid in during my working life. They spent it! What would you and have done with the money? We would have had some common sense and invested the money in something that would have been there to satisfy the financial obligation 40 years from now.
Let’s see. What did Bernie Madoff do? He advertised that if you give me your money for retirement I will guarantee a certain return and when you retire you can draw down your account. Sounds like SS to me. But, BUT, he spent the money too, on himself!!!! Now that does sound like SS! He went to jail, Senators and Congress people have not gone to jail. SS is a Ponzi Scheme! And of course federal employees had their own retirement plan that actually did invest the money in reputable financial institutions that will pay their obligations without tapping the taxpayer purse until 1984. Now they must be in the same boat we are.
There is NO TRUST FUND that corresponds to a sound financial plan! The trust fund is part of the yearly deficit spending Congress puts on us taxpayers. There is no fund to pay benefits when SS has no money-bonds left.
The CBO estimates that in 2029 a 29% cut in benefits will have to be made to balance incoming and outgoing. We must address this without raising taxes on those still working. Which means reducing expenses somehow. COLA adjustments based on income, taxing SS if you make over X are two of the most popular.
DO NOT BELIEVE POLITICIANS THAT SS IS OK! I am not counting on it, I am blessed to have other income besides SS, many millions don’t.