Social Security Bandits-The Washington Mob


"Social Security has a "trust fund", and that trust fund is supposed to have $2.6 TRILLION in it, according to the Social Security trustees. The federal government has borrowed all of that trust fund money and spent it. And the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money-which, of course, it can't do because of the debt ceiling."(Merrill Matthews, "What Happened to the $2.6 Trillion Social Security Trust Fund?", Forbes, 7/13/211)


​If you and I administered our personal finances in the same way as our US Federal Government we would be bankrupt. The Government pays the expenses for Social Security payments to retirees, their spouses, disability claims, etc., from a combination of; what is received by workers who pay their Social Security payroll payments/interest revenue from lending out money from the Social Security Trust Fund . Until 2020, the money received has been enough to cover expenses for payouts to retirees and other recipients from Social Security with money left over which has been held in a Social Security Trust. That has grown to over $2 Trillion.



But our Government overspends and needs money to pay for all the General Budget entitlements and expenses it incurs, mostly due to commitments made by campaigning politicians. The US Government does not have its own money so it must borrow money to fulfill its obligations. It only has what it receives from tax revenue and what it can borrow. When it sees all that money sitting in the Social Security Trust Fund the temptation becomes too great and it insists on borrowing from it to fulfill its own General Budget obligations.


The Federal Government borrows from the Social Security Trust Fund and pays about 2% interest on the loan, which is consistent with competitive payouts for such bond issues. This interest earned from loaning money from the Social Security Trust Fund to our own US Government is then considered as revenue" for the Social Security Administration. That revenue from interest earned assists in paying for the expenses of payments for retirees, disability claims, etc.


Until 2020, the Social Security revenue from contributions made by workers along with interest income has been adequate to pay Social Security expenses. Now, Social Security revenue is no longer sufficient to fulfill its obligations so it must begin to use capital from the Social Security Trust Fund but without corrective action taken that will be depleted in 2035!


Can you imagine our over committing on Social Security payouts and mismanaging money to the point of not only using all revenue but actually depleting our Social Security reserves? The situation is more desperate when one considers that as the Social Security Trust Fund is depleted, the former interest income received (By our own Government, no less.) will diminish. This is insanity! But it is due to the uncontrolled functioning of politicians who make promises and commitments which are unaffordable.


What is the proposals of politicians to correct this very real Social Security crisis? There are several, none of them good:

1. Increase the Social Security Tax rates required by workers.

2. Raise the Retirement Age Limit.

3. Reduce the amount paid out for Social Security benefits paid to retirees and other recipients.


Some, if not all, of these actions will be required if all other current conditions remain. It is all the result of non-responsible, unimaginative, ludicrous, administration of "our" money by politicians. Politicians running our budgetary system have over-extended the entitlements and subsidized rewards to citizens for the sake of gaining votes during campaigns. Our nation has incurred debt and exhausted funds to the point that it would be criminal if done in the private sector. This political machine over-extends its commitments, borrows from itself, and subjects the well-being of the US into the hands of other nations which own US debt bonds into the trillions of dollars (China-$1.2 Trillion, Japan-$1.1 trillion, Brazil-$600 billion, etc.).


What alternative to the above austerity measures for remedying the Social Security crisis could be taken with the leadership of an imaginative, objective-thinking person in the White House?


1. Think outside of the traditional "logic-box" of Washington politicians. Use sane, responsible, viable logic and consider all options. Begin by ceasing to use Social Security funds to pay people to do what they can, and should, be doing themselves.

For instance, 15% of Social Security payments are made to "disabled workers". In 2013 terms, this amounts to $11 billion every year! Assisting the disabled would be considered as an essential responsibility for the Federal Government if it was not tragically abused and used to pay unscrupulous scammers who have no legitimate claim for being qualified as "disabled". The verification process is an atrocity and people seen doing physical labor in their yards, heavy lifting, or painting on ladders, in their unemployed time at home are draining the Social Security funds every year. This is only one example of what could be done to correct the abuse and wasteful spending.


2. Provide workers who are required by Federal Law to invest a portion of "their" salaries into Social Security alternative options for investments. Interest paid on loans from the Social Security Trust Fund by our own Government averages about 2%. Workers should be allowed to allocate at least a portion of the money paid for Social Security into alternative investments that are safe yet provide a higher return on their investment. Government bonds are safe but pay only 2% return. Other options could be a viable alternative for investors-"you".


3. Regrettably, our current crisis may well require some of the austerity measures shown above to be necessary even if corrective steps "1. and 2." above begin immediately. But these austerity steps must be taken NOW. The longer we hesitate, the more desperate the situation becomes and will demand even more extravagant corrective measures to be taken. Politicians do not like to portray their ineptness and how their irresponsible method of handling our money has rendered us into such a mess. They certainly do not like to bring up such issues during a political campaign period. But we must have a leader, a President, that holds the Government accountable to having the best interest of the citizens as its priority and forces legislation to be made that immediately begins corrective action. We need a President who tells "the truth".


Our current crisis has been predicted for decades. It has been another case of the abuse of trust by politicians who promise entitlements and benefits for citizens which cannot be afforded by available resources. We must have leadership in the White House that guides our representative body of government to return to the concept of reasonable, logical and responsible administration. This is what "The People" deserve and should expect.