Saving Social Security

A few relevant facts are listed below:

  • Over 2.5 trillion more dollars was paid into the Social Security Trust Fund between the years 1983 and 2011 than was paid out of the fund in benefits.
  • The national government borrowed the surpluses and issued special series treasury notes and bonds to be repaid to the Social Security Trust Fund.
  • The amounts owed to the Social Security Trust Fund can and will be repaid just like all other notes and bonds of the national government or else the credibility of our national government as a borrower will be lost.
  • When the amounts currently owed to the Social Security Trust Fund by the national government are added to forecasted future collections, the Social Security Trust Fund is projected to be able to provide full benefits to recipients until 2036. After 2036, tax income would be sufficient to pay about 75% of scheduled benefits through 2085 even if nothing is done to strengthen the program1.

Workers who have paid not only for the generations before them but also for the surplus amounts that have been borrowed by the national government, are certainly entitled to receive benefits.

There would not be enough money coming into the Social Security Trust Fund to pay those workers their benefits if younger workers were allowed to opt out of the program.

Since today’s younger workers and their employers have already been paying payroll taxes into the Social Security Program, those workers are also entitled to receive benefits when they retire.

Social Security contributions of workers are currently matched by employers. If the Social Security Program were in some way privatized, those matching amounts would be lost.

Some argue that if they could invest their own money instead of contributing into the Social Security Program they would be better off financially. That argument might be true for some. But most people would not adequately invest for their retirement and would not be able to care for themselves financially in latter years as was the case prior to establishment of the Social Security Program.

Listed below are some measures that would strengthen Social Security:

  • Payroll taxes for Social Security should be returned to 6.2% of worker wages matched by a 6.2% employer contribution as soon as possible. We have to wonder if our national politicians are deliberately trying to destroy the Social Security Program. Only a fool would argue that reducing the contributions going into a program that is universally recognized as currently under funded is prudent. There are many ways to stimulate the economy without intentionally damaging Social Security.
  • Starting in 2020, make the age for early retirement 64 and full retirement 67.
  • Raise the threshold that payroll taxes apply to, from wages below $106,800 to wages below $200,000 beginning in 2016.

There are numerous other possibilities for Saving Social Security. What is important to understand is that such a vital program can be salvaged for future generations with only modest adjustments.

1 — Social Security and Medicare Boards of Trustees, “A SUMMARY OF THE 2011 ANNUAL REPORTS”, Actuarial Publications, 9/22/2011, pg.1, Web Site: