Question: what kind of Social Security retirement system counts as a crucial part of its revenue, a stream that will suddenly run out (as in dry up) just as that stream is making its biggest contribution (about 25%)?
Answer: The 1983 Congress, instead of setting up a straight forward scheme whereby federal income tax systematically filled in for projected FICA shortfall, concocted the so-called Social Security Trust Fund.
I don't know why Congress would concern itself with Social Security shortfall 25 years down the line in the first place -- and then not care to provide for 50 years out when the so-called Trust Fund would suddenly run out.
For the first 25 years (1983-2010), excess FICA revenue was redirected to pay for things normally paid for by income tax -- like court houses and bridges and aircraft carriers and FBI salaries. After 2010 FICA revenue turned negative -- as retirement payouts exceeded income.
With the Trust Fund dry up now looming (10 years out), we are starting to hear about Social Security's so-called "crisis." Social Security is supposedly running out of money.
Simple solution: legislate a taxing mechanism that enables income tax to be used for FICA tax shortfall -- which is what we have been doing all along, and which is all Congress ever had to do in the first place. Lazy alternative: print up a bunch of bonds and stuff them into the Trust Fund. They were never more than IOUs to ourselves in the any case.
Tuesday, January 14, 2025
So-called Social Security Trust Fund drying up? Who's worrying?
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