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How should we think about this intragovernmental debt? The Treasury department collects $100 in Social Security taxes, the SSA spends $70 on Social Security benefits, and the other $30 goes to, let's say, military spending. Since $30 was collected for Social Security, but spent on the military, the Trust Fund now has $30 of bonds. The bonds are simply promises of future taxes. The feds collected the money for Social Security and now they are going to collect taxes again for Social Security spending. The $2.4 trillion of bonds in the Trust fund represent Social Security revenues that need to be collected a second time, since the tax revenues did not go towards Social Security spending when they were initially collected. In fact, all of the intragovernmental debt represents future higher taxes.
Social Security is a "pay-as-you-go" system. This means that when you work, the government takes your money and gives it to Social Security recipients. In order to get workers to accept this system, the government promises to take other people's money and give it to you when you retire. Think of it as an exponentially larger version of Bernie Madoff's Ponzi scheme.
This system is a massive income-redistribution scheme, taking one-eighth of most workers' incomes. The total tax burden is hidden from the workers. The tax revenues have been used to cover the deficits in the rest of the government's budgets, and the only way to make the system sustainable is to give the participants a negative rate of return on their money.
The Social Security system has run its course. It's unfair and it's economically destructive. It's time for the program to be abolished.
stop asking silly questions. It will never happen.
I should at least be allowed to opt out if they won't abolish it.
Originally posted by ChrisF231
Im 21 right now and between the Baby Boomers and the inevitable amnesty of the illegals I have no doubt that the SS fund will be empty by the time im 41.