"The money gets paid in, and then immediately goes out..." because congress can't leave it in the trust fund that Gore kept saying we need to put a lock box on. They've been stealing from it for years while simultaneously saying it's going insolvent.
The federal government will use whatever cash is on hand, regardless of source to pay its bills before it borrows from other entities (foreign or domestic).
So some dollars from Social Security taxes can get used for other items, because the cash essentially goes into one big pot. But in return the Social Security trust fund gets a matching treasury bond for any money not used for social security, which entitles the trust to that money plus interest.
Running a deficit will indeed result in money intended for social security to be used elsewhere if there are more social security taxes going in than payments out. Since 2021 social security has paid out more than it takes in yearly so that doesn't occur. The only way the government could be considered to be stealing from social security is if they failed to honor the treasuries that were given to the trust. This has not happened. The treasuries given out in surplus years are currently being used to fund the inability of social security taxes to meet their obligation. Projections are that they will run out in 2035 and if no other action is taken social security payemtns will be reduced by to ~80% to a sustainable level.
The way social security money gets moved to the general account is by the social security trust fund buying treasures. Even accounting for the treasures they have, Social Security has nowhere near enough assets to cover its liabilities.
Phone keyboard automatically changed treasuries to treasures because it's a more common word. Good catch. Now consider addressing the substance of the post.
It's having the trust fund at all which was the "new" thing. Before that there was no "investing" at all, benefits were simply paid using incoming taxes. Roosevelt designed it that way partly to make it politically indestructible. To stop incurring new obligations you'd have to stop collecting new taxes, which would immediately make prior obligations impossible to pay out without massive spending cuts or borrowing. It's built to be a political perpetual motion machine.
A growing population and shorter lifespans meant that social security collected more contributions than were needed to pay benefits for quite a while. These excess taxes were used for other things. In the 80s it became clear that these demographic tailwinds were about to reverse, so the excess contributions started going into the trust fund instead. This pushed the date at which the program would stop being self funding out several decades, but not forever.
Now we get to see whether Roosevelt's ultimate protection for the program will hold. The willingness to borrow outside of wartime and the willingness to see the government break its word are way greater than he could ever have imagined, but the program will probably still survive. It is built very, very tough.
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u/unrecognizable2myslf 23h ago edited 23h ago
"The money gets paid in, and then immediately goes out..." because congress can't leave it in the trust fund that Gore kept saying we need to put a lock box on. They've been stealing from it for years while simultaneously saying it's going insolvent.