Even the Social Security Trustees claim the trust fund will be exhausted in 15 years, and the House Minority Leader, Mitch McConnell, has no plans to save it.
It is well worth noting that any program Republicans object to but is wildly popular is given a "trust fund". This allows the program to be systematically dismantled by using the fund to 1) place its funding in a vulnerable position and then 2) by offering up "privatization" as the best possible fix.
The same tactic is currently being used against Medicare part A, but part B, the part that pays hospitals that are mostly corporate now, is having no such issues. The funding is always approved for corporate giveaways.
The USPS is another example of using "prefunding" and control of that funding to destroy something they are ideologically opposed to while avoiding blame for destroying a popular program. The USPS was forced to prefund all of its employee benefits a full 75yrs in advance to make corporate delivery mail services more competitive. Congress controls postal rates and could have fixed all the funding issues of USPS with a couple of pennies of increase in postal rates, even with the ridiculous demands, but refused to do so.
Even the Social Security Trustees claim the trust fund will be exhausted in 15 years, and the House Minority Leader, Mitch McConnell, has no plans to save it.
Even if one believes that Social Security is actually funded with our payroll deductions or Treasury bonds, the fact that nothing has been done except allow the "trust fund" to be depleted says that the politicians aren't friends of the program. Democrats, firmly believing that "markets" will solve all economic and social problems, have displayed similar dishonesty when the failure of the program means such a huge windfall to Wall St.
For most of my life, I believed that the money deducted from my paycheck went into the SS trust fund for my future benefit.
That's not true. The money that was taken out of my paycheck went directly to fund current retiree benefits. It's a pay-as-you-go system.
The program was originally set up to function with the Treasury bonds as a way to give beneficiaries a "legal" claim to their benefits that Republicans couldn't get around. That's how much FDR trusted Republicans to do what is right for seniors, or anybody.
I believe, it was Sir Ronnie Raygun that split the funding at the time he doubled payroll deductions to "save" the program. What he actually did was to double the most regressive reduction of middle class spending power in history. Boomers were asked to "prefund" part of their burden on the system resulting from their numbers, which only would have made sense when deductions from their wages would have given them a claim to part of the gold reserves of our country.
If current benefits exceed payroll taxes, the Social Security Administration draws on the surplus to cover the shortfall and meet benefit payments.
This is where logic fails to explain why anyone's benefit would be cut off should the government not be able to create deficit spending of new money. If, as we are led to believe, the trust fund actually contains our extra payments to the system there should be no cessation of payments.
Some people fell for Republican rhetoric about the trust fund being "borrowed" to fund other spending over the years, mingled with the general funding. That doesn't fly for anyone who understands that bonds can't be redeemed until they "mature", at which time the "full value" of the bond is replaced with "NEWLY CREATED" money from non-discretionary spending (entitlements).
Either bonds are funding our retirement or money creation is, but it can't be both ways. Since it is obvious that Congress' inability to create new money when the debt ceiling is reached also stops benefits from going out to recipients, I'd say that mystery is solved.
In fact, the trust fund balance is just short of $3 trillion. This is the fund that is expected to run dry over the next 15 years.
In 2018 when Mitch McConnell was the Senate Majority Leader, he claimed "entitlements" were the fundamental cause of rising federal deficits and blamed Democrats for refusing to go along with proposals to cut spending by Medicare, Medicaid, and Social Security.
Firstly, this assumes that "deficits" are a bad thing, which they aren't. But beyond that, it is wildly inconsistent and contradictory given that Medicaid is the only one of the three programs that isn't supposed to be self funded with dedicated taxation. Just a shallow dive into Americas budget and payments shows that none of the three are exempt from requiring full funding from yearly budgets.
This begs the question "Where did the money from payroll deductions go?". The short answer is "It was destroyed against the debt, as are all government revenues." Once this is confirmed it becomes more than obvious that MMT's description of macro-econ at the federal level is accurate and a lot more of the pieces that have been shrouded in complexity fall into place when that same light is shown on them.
There is only one reason for any misery in this very rich country if that can be mitigated with federal spending. That reason is that someone powerful "WANTS YOU TO BE MISERABLE" and has made a political decision to make that happen. It certainly can no longer be written off as "economics" or "fiscal conservatism". Austerity politics, when the option to fund a better way is available, is literally murder by proxy and it is killing Americans every day.
