Projections that the Social Security trust fund will soon be depleted enhances with respect to how older Amec?

Answer 1

There is no danger that the Social Security trust will be depleted anytime soon - but there is a problem, and it can not be understood without a brief history lesson:

Until 1983, Social Security was a pay as you go system - a contract between generations, where the younger generation paid for the retirement of the previous generation. But in 1983, Congress recognized that the retirement of the Baby Boom generation would put an unfair burden on the next (smaller) generation of workers unless changes were made to the system. As a result of the massive 1983 reform package, the retirement age was scheduled to gradually be raised to 67 in order to account for longer life spans and social security taxes on wages were increased by about 1/3, in order to build up a real trust fund to help pay for the retirement of the baby boom generation. As a result, the trust fund has built up a surplus of over two trillion dollars - and the baby boomers paid for their parents' retirement while providing for their own as well. By one measure, the 1983 reform package has been wildly successful, as the surplus in the trust fund is now predicted to last at least until 2042, when the oldest baby boomers will be 96 years old if they are still alive. (Even then the Security System will not be broke - It will just have to go back to a pay as you go system - which may not be much of a problem if the baby boom generation is dead and the economy does well.)

Moreover, 2042 is 35 years from now, and the prediction that the surplus will be gone by that year is little more than a conservative guess, which assumes that lifespans will continue to get longer and that the economy will not do particularly well.

When the social security reform legislation was signed into law by Presdent Regean in April of 1983, he said:

"We're entering an age when average Americans will live longer and live more productive lives. And these amendments adjust to that progress. The changes in this legislation will allow social security to age as gracefully as all of us hope to do ourselves, without becoming an overwhelming burden on generations still to come.

So, today we see an issue that once divided and frightened so many people now uniting us. Our elderly need no longer fear that the checks they depend on will be stopped or reduced. These amendments protect them. Americans of middle age need no longer worry whether their career-long investment will pay off. These amendments guarantee it. And younger people can feel confident that social security will still be around when they need it to cushion their retirement."


Early in his first term, President Reagan promised to balance the Federal Budget by 1983. The problem of course is that we have had massive budget deficits under the administrations of Reagan and Bush I and II. Because the baby boom generation has not yet started to retire, this year congress will be able to borrow and will borrow over 150 billion dollars from the social security trust fund (in addition to the approximately 2 trillion dollars that has already been borrowed), every penny of which was paid for by FICA taxes on the wages of working people - and congress has no plan in place to pay it back when it is needed to pay for the retirement of the baby boom generation. This borrowing has masked the true size of the federal budget deficit.

The lowest paid minimum wage worker and a person making $90,000 per year pay social security (FICA) taxes at the same percentage rate. The justification for this that FICA taxes are like retirement savings.

When President Bush complained (in his 2005 State of the Union address) that in 2017, the trust fund will be paying out more than it takes in and when he calls the trust fund a "worthless bunch of IOU's," he is in effect asking for "debt relief." He wants to find a way to avoid repaying the debt to the trust fund so that he can preserve his 15% dividend and capital gains tax rates and his other tax breaks for the rich.

Nobody expects the government to outright default on Social Security's government bonds - Instead, we can expect a lot of smooth talking tricks to justify not having to pay them back, such as:

1. Convincing the public that the problem is with the trust fund rather than the rest of the government.

2. Convincing the public that the trust fund will be completely bankrupt in 2042, in order to justify cutting benefits in the near future.

3. Increasing taxes on Social Security Benefits, so that the government takes back more of what it pays out.

4. Increasing payroll taxes on workers (which would just put more money into the trust fund for the government to borrow and not pay back.)

5. Changing to a system of private accounts.

When the public understands the real problem, it will understand that we are faced with a profound moral issue: Is it right to borrow and spend somebody's retirement money and not pay it back. If the CEOs of a big corporation (like Enron or World Com) had taken all the money from their employees' pension plans and replaced it with a bunch of worthless stock or worthless IOUs, they would be headed to jail. In the alternative, is it right to maintain tax cuts for the rich and pay back the retirement money borrowed from the trust fund by passing the entire cost of doing so on to the next generation - something the 1983 reforms were intended to avoid?

In order to take the high moral ground on this issue, Democrats must recognize that they had a hand in creating the big deficits of the past 23 years. Both parties have been buying our votes with borrowed money for far too long. But in any event, the press and politicians have an obligation to explain to the public that it is not social security but the rest of the government that needs reforming. Neither the Democrats nor the Press have done their job.

The Democrats defeated the idea of private accounts, which was just smoke and mirrors designed to distract the public from the real problem. Since then Democrats have sat back and said nothing. When President Bush said there would be a problem paying back the trust fund, they should have called him on it. If the Democrats had courage, they would ask the people whether they would prefer that the Bush tax cuts be rolled back or would they prefer that a large part of the Baby Boom generation's retirement savings be confiscated to maintain tax cuts for the rich; or would they prefer that an intolerable burden be passed on to the next generation.

Answer 2

My husband and an older friend are retirement age. Each of us checked our benefits a couple of years early to better plan our retirements. Then last year both of us checked them again. In both cases the statements read a hundred dollars less a month on both the early and the full retirement amounts. Plus the age has gone up. Depending on what month you were born, you may have to wait almost another year for any benefits.


Social Security is not in a "trust fund". As I understand the term, a trust fund is like something set up for a minor child after the death of a parent or for the use of a spouse in an inheritance situation. In both those cases accountability is involved. A court presiding over the distribution of funds for a minor where there is no other representative will hold the money in a registrar while allowing it to earn as much interest as possible. An executor of a will must take similar private measures to insure the funds will be available to the best of his ability. No one is allowed to borrow money on these trusts. The social security money was there as it was deducted from our livelihoods all these years. But for whatever reasons our congress and presidents have agreed to allow that money to be squandered. They need to pay it back from their own pockets.

Answer 3

the social security fund was designed to allow people to have money in their old age but ever since its creation the government has used it as their own personal piggy bank for whatever they please; a piggy bank that they themselves dont even contribute to, they get their own personal solid funds. what people need to do is continue to pay the SS taxes (considering you have to) but to also open an Individual Retirement Account. Soon enough the social security fund and the taxes that come with it will be eliminated and IRA's will be the only option. The other outcome, which is more likely to happen because it is more pleasing to the majority of the population is to have the optioin of paying SS taxes or to have a private IRA. Most people would still open an IRA because most of the money payed into SS taxes is never seen again by the taxee.

Answer 4

The 'Social Security Trust Fund' is a collection of IOUs from the federal government. It has never had any money to begin with. Without the rest of your question, that's the best answer I can give.

Answer 5

OH FOR PETE'S SAKE!!!!!! If we really want to stop the bleeding of social security, they need to stop approving kids to get $500 a month because of a 'learning disability'. I knew one family up the street that had 5 kids, 2 of them getting that for ADHD, and I have a kid with ADHD and believe me, THEIRS DON'T HAVE A PROBLEM. But that doesn't matter cuz they are suckin off $1000 a month from your paycheck deductions, fools!!!!

Answer 6

you can thank al gore and the democrats for that. that was the tie breaking vote to tax social security and put it in the general fund breaking a fifty year guarantee for the eldery. the real solution is to put govt workers in it and privatize it for the people like me that want out. the projection is without change quickly it doesnt look good.