Social Security to run out faster

In 2021,  social security for the first time ever will cost more to pay out than the income brought in from those in the workforce.  The deficit was projected prior to the Coronavirus pandemic [DYI HOAX] which is only going to add fuel to the fire of social security running out.

DYI:  First of all Social Security will not go flat broke if there is no intervention from Congress – a highly unlikely event – to put the program back into balance between incoming and outgoing dollars benefits would have to be reduced by 25%.  What Congress will do once the program is on the precipice for reduction they will attach a single line to a bill they know will pass stating all shortfalls will be made whole from general taxation.  End of problem. 

“When social security started 42 people were paying into the system for every 1 drawing out and on top of that the average time that 1 person actually drew social security before passing was only 2 years. With people living well into their 80’s and beyond now, it’s not uncommon for someone to draw social security for 20 years and the system just wasn’t set up for that,” Reeves said.  “Back in the 60’s the average family hovered around 6 people and now families are have only a couple children typically and as time goes that means a lot less people to pay into social security.”

DYI:  I’ve always held the opinion that Social Security should have from day one been funded from general taxation not the regressive FICA taxes employees see on their wage statements.  Why did Congress back in 1935 devise Social Security as a stand alone program?

 

Simple. 

The true underlining reason the vast majority of income taxes [not FICA taxes] would go to the military [which remains to this day!].  Plus Roosevelt was hell bent and determined to have the U.S. enter World War II.  The excess Social Security payments was plentiful at that time would go into general revenues to which Social Security would be given IOU’s for that amount.  Roosevelt looked as the savior for the older folks during the great depression by providing some level of retirement means AND opening up additional jobs for younger people.  With World War coming Roosevelt was able to push through a tax increase – during the great depression no less – to increase dollars available for the military!  And that my friend’s is how Social Security came to be.

Today Social Security and Medicare reduces an employee’s paycheck by 15.3%!  Half of that amount is pick up by the employer however your total compensation is factored in – thus reduced – to reflect that cost.  In other words the employee bears all of this cost through an overall reduced paycheck!  That 15.3% is borne heavily upon young people just entering the work force and the poor making it far more difficult to lift themselves out of poverty.  Funding through general taxation has its costs as well at least the larger dollars needed are paid by those – [at least in their current situation] – who can afford the most to give by our progressive income taxes.

I don't want to go too far down the rabbit hole when it comes to taxation.  As we all know or should know there is no perfect way to tax anyone.  Taxation is always enforced by the barrel of a gun.  Don't believe me?  Just stop paying your taxes and soon you will have men and now women at your doorstep all carrying sidearms.  The best way to reduce the burden of taxation is for the ending of these endless, worthless Federal Agencies.  The citizens in our 50 States can then decide if they want to resurrect some, all or none of the functions these agencies provided.

Till Next Time

DYI