Why Social Security will never be bankrupt


Ideological dogma often complicates what should be very simple.  From the very creation of Social Security in 1935, there have been the liberty-puritans who are adamantly opposed to the idea that government should take a portion of our income for purposes of a basic safety net when we are too old to provide for ourselves.  The sacrifice of a small portion of personal choice has resulted in an undeniably massive social benefit.  Poverty among the elderly is now less than 15%, whereas it was once above 50%.  The disabled who cannot work, or cannot work full time, also are relieved from poverty by that 6.2% tax we normally pay into social security.

However, growing up in the 1980s, I was deceived by the liberty-puritans into believing that Social Security would be bankrupt by the time I would reach the age of retirement.  I was told that the money was running out, and by about 2040, it would be depleted.  Anyone who makes such a claim is either ignorant, or lying.  The Social Security Trust Fund will likely be depleted by 2037.  However, they will not be broke as long as there are people paying the Social Security payroll tax, and as long as that money does, indeed, go into Social Security.   At this point in the debate, the liberty-puritan usually responds with the red herring, “But that’s not even real money.  The trust fund has all been borrowed by the Federal Government.”  Let’s give them that one for the sake of argument, and assume that there is no real trust fund.  Let’s even assume that the Federal Government will never pay back one dime of that borrowed money.  This does not change one simple, irrefutable fact – We are still paying for it!  It’s not complicated.  As long as we continue to pay 6.2%, matched by our employer, Social Security will continue to receive 12.4% of our income.  Therefore, they will always have new revenue, and will never be bankrupt.

A more realistic concern is that they will not be able to pay full benefits.  Based on current estimates, Social Security will only be bringing in enough revenue to pay about 80% of benefits.  That means that if we do nothing, by 2033, benefits will either be slashed by 20%, or the Federal government will use general tax revenue or borrowed money to subsidize the program.  Because of this, adjustments will need to be made to ensure that this does not happen, such as increasing the age to begin receiving benefits, raising the tax in some fashion, or cutting the amount of benefits more gradually.  As the program continues, people are living longer and having fewer children.  This means that people receive benefits for a longer period of time, and there are fewer younger people to pay into the program.  There will always be a need to re-examine the program and make adjustments to fit these changing demographics, in the same way as any private insurance company would.  This is nothing more than the result of the natural change in demographics seen in the developed world.

This program has been beneficial and remains widely popular across party lines.  Only the liberty-puritans object to it.  Some of them raise honest objections to the idea that government should “plan our retirement for us”.  That is a fair criticism, but most of us are willing to make that sacrifice in order to ensure that we don’t starve as elders.  However, some of the more unscrupulous liberty-puritans jump at the opportunity to exaggerate the aforementioned challenges to Social Security and scare us into thinking that the program won’t survive.  They know that the only way that they can gain political momentum to dissolve this program is with lies.  The lies cause us to fear, and the fear causes anger toward the program.  The anger then escalates into momentum to go ahead and dissolve the program instead of continuing to pay for it.  After all, if it won’t be there anyway, then why would we want to pay for it?

As a country, we have already had this debate.  Anyone who has been paying attention for the last several decades already knows the facts.  The enemies of Social Security, however, know the power of fear, and they clearly are not afraid to wield that power.  We do not need to fear that the program is broken.  We will not convince the fear-mongers that Social Security is doing fine and only needs minor adjustments.  They already know, and they don’t care.  We can, however, combat their misinformation campaign with simple facts.

This politifact article confirms my facts about social security and povery:


This Wall Street Journal article confirms that the SS Trust Fund is projected to run out by 2033:


This report directly from the Social Security Administration predicts that if we make no changes, SS will need to cut benefits by 22% in 2033…so they will still be paying 78%:


Here is the Center on Budget and Policy Priorities link, where I found the chart above:



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