Social Security is running out though, this fund is already cash-flow negative and eventually there won’t be enough to go around and support the needs of so many retirees.
What a load of hogwash propaganda. But I’m betting it’s great for the investment business.
You’re right about one thing though. The Social Security fund is broke, as in it has no money in it. That’s because the US Treasury is broke as well, and always has been in terms of existing dollars. The government is always broke because it is the monopoly issuer of the US dollar per Article 1: Section 8 and doesn’t need to “get” money to spend. Even tax collections don’t directly “fund” anything in our monetary system. The government never needs your money to spend, but it does need you to need its money, which is the primary purpose of any tax. Occasionally, it needs you to have less of its money to control inflation as well.
What the government does have is the debt that is created for every dollar it creates in the private sector. It isn’t complex and anyone familiar with dual entry spreadsheet accounting knows this intuitively. Every positive entry in any sector requires an opposing entry in another sector. When those entries come together in any single sector they cancel each other to zero. This system is used worldwide to track and error check money flows. The total of money created in the private sector but not yet used to pay federal tax liability or purchase Treasury debt is always equal to the “national debt” that lights everyone’s hair on fire. It isn’t politics or ideology. It’s just math.
It has been estimated that perhaps by 2035 Social Security might be fully exhausted, millions of people who are expecting to see benefits then might simply be out of luck and left looking elsewhere for help. Despite having paid into the system for years they still won’t be able to claim any help from it and that will be a huge problem.
When you paid the mandatory FICA tax you were exchanging your productivity for a promise of repayment, a legal claim to that money in the future when you are no longer productive. The actual money was destroyed by the debt that created it as soon as it entered the government sector. This is how bonds work, not to fund anything. This also means that the government must create new money to recapitalize those bonds when they mature, which can be proven by simply tracking the money from appropriations to spending. Your tax contributions make it no easier to create that money than it would be without them. They simply reduce the amount of money in circulation.
The mismanagement of the program and the general economy doesn’t relieve the government from the legal obligation created by the tax. The actual level of benefits paid is and always has been a political spending decision. The viability of the program at any level of benefits is dependent upon the ability of the government to create money to pay the benefits and the ability of the economy to produce the goods and services the funds will be deployed to purchase in the future, not the level of numbers in a “fund” that is always zero. Collecting (canceling) more money now will not create those conditions on its own. The wild-eyed liberal Alan Greenspan explains all of this to Paul Ryan while under oath in this video.
