Is that why Social Security is heading toward insolvency?
And yet many Americans believe it’s true.
Social Security Trust Funds are real. Social Security payroll taxes are collected and, if they exceed the amount needed to pay current benefits, the surplus is invested in special U.S. Treasury bonds. (Currently there are not any surplus taxes) These bonds are held by the Social Security Trust Funds. The money is not kept in a vault, but is used by the government for other spending, just like a bank uses a customer’s deposits. In exchange, the government owes the Social Security program the principal plus interest on those bonds.
The government has never failed to pay Social Security back. When Social Security needs to pay benefits, it redeems these bonds, and the U.S. Treasury provides the cash. This has always happened without fail. The bonds are backed by the full faith and credit of the U.S. government.
The “theft” myth comes from budget accounting. For a time, Social Security was included in the government’s “unified budget,” which made it seem like the surplus funds were being used to offset the national debt and allow for more spending elsewhere. While the surplus funds did make the overall budget deficit appear smaller, the trust fund still held the bonds, which are a legal obligation of the government.
QUINNSCOMMENTARY 
Reversing Biden Vote Buying.
The idiot ass Trump is getting ready to recind another Biden Vote Buying scheme which tried to spend $1.5 Billion over ten years by changing the eligibility criteria for Supplemental Security Income to include everyday support provided by other members of the household in determining financial need.
The administrative change had no basis in law or regulation. The change intentionally ignores financial and other support individuals receive from other members of their household – something that is clearly inconsistent with the eligibility requirements of SSI.
That said, the Biden Administration essentially gave the middle finger to the US Supreme Court with respect to its recent guidance on the “major questions doctrine”.
I assume the D’s will moan and groan about these “benefit cuts” – which were illegal, at best, and fraudulent at worst.
This is the kind of crap that goes on all the time because of the Democrats assertion, starting with President Obama, that all they need is a “phone and a pen”.
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You miss my point.
Congress was able to spend more, much more than they were willing to tax. As a result, they dug the debt hole deeper, and deeper, and deeper.
Worse, they wasted the money on stuff like the Inflation Reduction Act and the Patient Protection and Affordable Care Act.
You can make excuses for Congress all you want. You can lie to yourself that they did not misspend, and overspend, and misappropriate to buy votes. Not me.
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You wrote “The money is not kept in a vault, but is used by the government for other spending, just like a bank uses a customer’s deposits. In exchange, the government owes the Social Security program the principal plus interest on those bonds.”
It seems like the government is “stealing” from SS because they are saying those bonds won’t be available to honor your full SS payment after 2030. But what you are saying is that these IOUs won’t be enough to pay us our full SS payments with the current system in place.
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Not saying that at all. Bonds are now being redeemed and only after they are all redeemed and used to pay benefits will the trust need to rely almost exclusively on incoming FICA taxes which are not sufficient to pay full accrued benefits. Estimated 2033 for that to occur. In the meantime the government must borrow elsewhere to pay the trust the redeemed bonds. You can think every Congress since 1983 for the unnecessary mess they created.
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Did Congress steal the Social Security funds? I agree, they did not.
But, Congress has spent every penny of those monies on other stuff, when they issued bonds. So, there are bond investments in the trust funds, IOUs, that must be honored by raising general revenue taxes. However, we are running $2 Trillion a year in annual deficits, and Congress seems reluctant to raise taxes to fund those monies, so, in all likelihood, we will continue to see $2 Trillion or more in annual deficits while those bonds are being redeemed – right through 2032 when the last bond is redeemed.
If America was running a budget surplus and had no debt, where would Congress invest those monies – perhaps somewhere that had a higher rate of return over the past 90 years!
Steal, no. Spend, yes!
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You’re right. But all debt issued by the government, any government is spent. That’s why it’s issued, that’s why I hold municipal bond funds.
The idea for this funding method was security more than income. Where could the funds be invested with equal security? I wonder what would happen to the stock markets if these funds flooded them.
According to the CRFB calculator, investing in the markets assuming a 8% return closes 6% of the funding gap with increased risk.
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