Someone recently told me the problems faced by Social Security were the result of Trumps policies. While it’s true that limiting immigration does cut income to SS, in the scheme of things that is irrelevant.
The Executive Director of Social Security Works Tweeted me this: “(the) trust fund is in fact a massive accumulated surplus that is used to pay benefits.” A massive surplus? It is very sad that people think that and even sadder they actively try to get Americans to believe it as well. It’s not true, the Trust is not a surplus and never has been. The Trust is a reserve to be used to pay a portion of already created obligations. The $2.8 trillion in the Trust is a fraction of the already accrued liabilities. Those ultimate liabilities exceed $30 trillion and even if you project only one generation, the number is around $11 trillion.
This kind of misinformation or simply naive world view is one of the major dangers we face.
The following photos are of the 2009 Social Security Trustees Report. Read it for yourself. Does anything in it sound like there is a surplus that can be used to increase benefits? Read the first sentence, annual costs will exceed tax income in 2016. It actually happened in 2010. Consider in the second paragraph the shortfall is 2.01 percentage points of payroll. In the 2018 Report that has grown to 2.84 percentage points.
Then look at the projected dates when the Trust’s will be exhausted; 2037 and 2020. Those dates are now 2034 and 2032 (DI Trust date was extended because money was shifted from the old age fund to the disability fund), but even 2032 for the DI trust is three years earlier than reported in the 2017 trustee report.
Look at the last paragraph. “Trust fund deficit should be addressed in a timely way” Congress has done nothing in the last nine years to address Social Security except to put out misleading politically motivated rhetoric. Liberal groups have done nothing but call for increasing benefits and promoting the idea a non-existent “surplus.” And for the most part Americans believe what they want to believe and have no idea what is going on.
From the 2009 Social Security Trustees Annual Report