By Simon Black
On August 14, 1935, President Franklin Roosevelt arrived at his desk to sign the Social Security Act into law.
It had been a contentious legislative process, something like the Obamacare of its day.
Fiscally conservative politicians derided the program for its obvious long-term costs, the massive bureaucracy that it would create, and the huge tax increase that it represented on workers.
But Roosevelt was able to find support, and the law was passed.
And just before signing it, he proudly proclaimed that the law would go down in history “as a protection to future administrations of the Government against the necessity of going deeply into debt to furnish relief to the needy.”
Needless to say, that didn’t happen. Quite the opposite, actually.
Just like most western governments, the US government has gone deeply into debt to fund its social insurance programs.
Officially, the US government is now $18.5 trillion in debt, and Social Security is the biggest financial sinkhole in America.
Social Security’s various trust funds currently hold about $2.7 trillion in total assets [And even these "assets" from the US Treasury are IOUs based on money the government doesn't have--RW] yet the government itself estimates the program’s liabilities to exceed $40 trillion.
And Social Security’s second biggest trust fund, the Disability Insurance fund, will be fully depleted in a matter of weeks.
The trustees who manage these massive funds on behalf of the current and future retirees of America are clearly concerned.
In the 2015 report of the Social Security and Medicare Board of Trustees they state very plainly:
“Social Security as a whole as well as Medicare cannot sustain projected long-run program costs...”, and that the government should be “giving the public adequate time to prepare.”
Wow.
Now, we always hear politicians say that ‘Social Security is going to be just fine’. So this Board of Trustees must be a bunch of wackos. Who are these guys anyhow?
The Treasury Secretary of the United States of America, as it turns out. Along with the Secretary of Health and Human Services. The Secretary of Labor. Etc.
These are the folks who sign their name to the report saying that Social Security is going bust, and that Congress needs to give people time to prepare.
And prepare they should.
The US Government Accountability Office recently released a report showing that tens of millions of Americans haven’t saved a penny for retirement; and roughly half of Baby Boomers have zero retirement savings.
This means that there’s an overwhelming number of Americans pinning all of their retirement hopes on Social Security.
Bad idea. In a recently proposed resolution, H. Res 488, Congress states point blank that Social Security “was never intended by Congress to be the sole source of retirement income for families.”
Apparently they got the message from the Social Security Trustees and they want to start preparing people for the inevitable truth.
This is no longer some wild conspiracy theory.
The Treasury Secretary is saying it. Congress is saying it. The numbers are screaming it: Social Security is going to fail.
Ultimately this is a just another chapter in the same story-- that government cannot be relied on to provide or produce, only to squander and fail.
Sure, their intentions may be noble. But this level of serial incompetence can no longer be trusted, nor should we be foolish enough to believe that some new candidate can fix it.
If you’re in your fifties and beyond, you’re probably going to be OK and at least get 10-15 years of benefits.
If you’re in your 40s and below, you have to be 100% prepared to fend for yourself.
Fortunately you have time to recover. Time to build. And time to learn.
Financial literacy is absolutely critical here, which includes the ability to both generate income and manage money, two things that aren’t taught in the government controlled education system.
You might also consider some lifestyle adjustments, which may include moving abroad where your money can go much, much further.
Ultimately, learning to rely on yourself is no easy task, but it is an incredible opportunity to become more free.
And in doing so, one day you will no longer panic about the decisions being made by incompetent bureaucrats, because you will be the one in control of your own fate.
Social Security is the Private PROPERTY of the Workers that PAID for it.
ReplyDeleteSocial Security is a TONTINE, a TRUST FUND.. American workers pay into it their entire lives through payroll deductions. Social Security payments are supposed to come from that fund. So why is Social Security needing an increase in the debt ceiling? Where did our money go? Of course, this is a rhetorical question. Starting with the Clinton administration, the government "borrowed" the cash in the Social Security Trust Fund, replacing is with Treasury Bonds that the US Government is now unable to redeem. The implications are obvious. Because the US Government cannot redeem those Treasury Bonds in the Social Security Trust Fund, the US Government is already in default against the American workers. The American workers' money is gone. The US Government has effectively embezzled the retirement money of American workers. So, in borrowing money to replace the looted cash, the US Government is expecting future workers to pay for Social Security benefits that were already paid for once before, effectively double-billing We The People. To put it another way, the US Government just sold us an apple, but is forcing us to pay for two, and trying to look like this is wise fiscal management of the peoples' retirement funds!
Not to mention the money was worth 20 times more in many cases when they took it.
DeleteTrust fund? It was first, last, and always a Ponzi scheme.
ReplyDeleteOk, so then they owe the people who paid in but will never get it, they owe us our money back! I want my money back!
ReplyDeleteGood luck with that. Your absolute best outcome would be that they stop stealing the money from you and just end the program completely. Instead they will keep the theft going but just end the payouts.
DeleteFor those under forty (maybe even those under fifty), simply saving for retirement will not be sufficient. They will need to figure out how to preserve those savings. Otherwise the government will confiscate much of it to redistribute: both up to the crony classes and down to the dependent classes. Maybe in order to have $500K in retirement savings, you need to actually save $1M or $1.25M assuming that the hordes will confiscate at least 50% of it. Maybe more.
ReplyDeleteBuy precious metals which will keep their value long term and store them somewhere that you can physically control them. Simple.
DeleteWasn't there supposed to be some sort of 'lock box' for that money?
ReplyDeletehttps://www.youtube.com/watch?v=F9pqmW-D14I
Congress has a key to the lock so...
Delete> Social Security is the Private PROPERTY of the Workers that PAID for it.
ReplyDeleteNo, it's not. Just read the standing decisions of the U.S. Supreme Court:
SS is a political promise on which Congress can renege at any time,
because the original Act reserved that right to Congress; and so,
Congress has reneged. There is no "contract" right to SS benefits.
The "surplus" that politicians have cited in the past was merely the
difference between in-flow and out-flow in any given Fiscal Year.
Now that out-flow is starting to exceed in-flow, there is no "surplus".
To sustain a Ponzi Scheme a little longer, the base of that pyramid
must keep expanding. Now you know one of the reasons why
immigration laws are not being enforced: illegals are told they
can get a driver's license if they go across the street to the SSA
and return with an SSN. You can't even APPLY for a driver's license
in California if you don't disclose a valid SSN on the DL application:
the back side of the Application form states clearly that the
application WILL BE REFUSED if no valid SSN is disclosed
on that form.
Wow, I never really thought of immigration that way. The more immigrants they can get paying into SS the longer they can postpone the inevitable collapse of the program. Makes sense.
DeletePerhaps the most important question that one might ask is why are individuals so willing to trust an monopolistic institution with the sole power of coercion with their hard earned income? Such financial trickery is inherent in government.
ReplyDeleteBecause they have been in the institution's indoctrination camps for 12+ years of their lives and have been conditioned not to think anymore.
Delete
ReplyDeleteJust like most western governments, the US government has gone deeply into debt to fund its social insurance programs.
Officially, the US government is now $18.5 trillion in debt, and Social Security is the biggest financial sinkhole in America.
BULLSHIT! The reason were in so much debt is #1 The FED which charges interest on the money we pay them to create. #2 The wars declared and undeclared for U.S. EMPIRE building. #3 The DEFENSE budget debacle which is insane!