Social Security was never intended to be the sole source of income for retirees and the disabled. The payroll taxes that finance Social Security are currently set at 6.2 percent, imposed on both the employee and the employer. There are also wage base caps, which are earnings above this amount and are exempt from payroll taxes for Social Security. There is no doubt that Social Security is a delicate topic with voters and politicians. Unfortunately, the funding does not cover the increase in the cost of benefits. The future doesn’t look bright for Social Security.
The truth is that the government’s Social Security guarantee is one huge unfunded promise. Most people believe that our payroll taxes go to Social Security. What the government does instead of saving the funds and investing for the future is spend the money and give Social Security “special issue” government securities in return. The securities are locked in a file cabinet in West Virginia. These special issue bonds cannot be sold. In essence, they are government IOUs that the government issues to itself with the intent to pay the money back later with interest.
Suppose you and I could write IOUs to ourselves saying that they are worth something… that they have value, and at the same time, like the government, act like the IOUs are not liabilities. The government would not allow you, me or any other individual or corporation to use this type of record keeping.
As we see National Healthcare in our future, we have to ask how well managed is Social Security and has the keeper of the funds done a good job?
So what do you think? Vote below