Social Security

Or

Social Insecurity?

DYI Comment:

The potato will soon be hotter and hotter as the trust funds run out of IOU’s to pay current level of benefits within approximately 76 months from now.  To be blunt Social Security was designed from day one back in 1935 as simply a regressive tax with its excess dollars to be spent on other programs.  The trust fund created in 1983 to pay for the Boomer generation (along with the tax increase) was/is no different since the non marketable Treasury certificates are nothing more than fiction as a method of keeping track of funds going into general revenues of the Federal government.

From day one Social Security was never a stand alone program, never to be off budget (no matter what BS politicians’ state) and to never be a sovereign wealth fund creating an actual defined benefit retirement program.  It is a transfer program (benefits paid out) paid by Social Security taxes, and when deficits arrive paid by income taxes and/or Federal borrowing.  Simply put Social Security is no different from any monetary transfer program including welfare.

Fixing the Social Security Ponzi

Peter St Onge

Jul 17, 2026

Trump wants to convert Social Security from a Congressional slush fund into real assets you own, like an IRA or 401k.

The difference could mean $60 trillion dollars for the American people — more than the national debt.

This matters because social security is going bankrupt, with trustees saying we’ve got just 6 years until benefits are cut up to 25%. Because Congress pissed away every social security dollar on recreational wars and NGO grants, leaving social security the mother of Ponzis with an estimated $29 trillion of unfunded liabilities.

Two Ways to Plug a Ponzi

Democrats’ solution -- naturally -- is tax hikes and cutting off wealthier people who paid most of the social security taxes, Trump wants to shift it towards the 401k and IRA models where you actually invest the money -- and keep it.

That model has generated nearly $30 trillion of assets in IRA’s and 401k’s -- compared to $29 trillion of debt in social security.

Now the details are still coming since Trump accounts for kids were just launched, which seed $1,000 into essentially an IRA for kiddos, to which you can contribute another $5,000 per year.

That may not sound like much, but if you’d done that for today’s 18 year old they’d have $409,000 dollars -- not a bad way to start out.

In fact its enough to buy a house with cash to start a family. And it shows the power of compounding money rather than handing it to Congress to waste.

More important, starting with $409,000 gives young voters a stake in the free-market system Democratic Socialists are currently trying to replace with bread lines.

Trump Accounts for Grownups

Trump wants to do something similar for the grownups modeled on Australia’s superannuation system where social security taxes go into an account you own and invest like IRA’s and 401k’s.

The idea is it would work like Social Security, but instead of taking your money for Congress to spend the money would go into your account.

In Australia it’s built up over $4 trillion Australian -- in US terms about $45 trillion US.

Translated per American household, that would be about $350,000 in assets instead of $200,000 of social security debt.

If this sounds like a lot, consider if social security was run like a 401k or IRA, replacing social security’s 1.5% returns with 4.5% from a 50/50 stock/bond portfolio (4.5%) or full stock portfolio (7%) the average social security check today would go from $2,084 to between $7,960 (stocks and bonds) and $23,615 per month.

That’s the average check.

Put differently, Congress has effectively stolen between 74% and 88% of your social security dollars. And will keep stealing it until we get private accounts.

DYI Comment:

The national debt continues to expand from an ever out-of-control Congressional/Presidential spending spree(s).  In the not too distant future the interest payments maintaining the national debt will require additional taxes (individual and corporate) in order to reduce the need for monetization (inflation) by the Federal Reserve. 

Social Security IMO is highly likely going to be tapped once again for revenue generation by removing the caps (or at least expanding the threshold significantly).  This will once again allow Congress and Presidents to kick-the-can down the road postponing benefits cuts for Social Security and bringing in excess dollars reducing the deficits.