Social Security – Perpetuating a Myth
In an article posted on money.howstuffworks.com by journalist Laurie L. Dove, the report starts out on an even, informative keel, explaining what the Social Security 2019 cost-of-living adjustment will be and dispelling some common beliefs about how the annual adjustment (or lack thereof) is determined. Even though the explanation of how the Consumer Price Index for Urban Wage Earners and Clerical Workers is used doesn’t pinpoint which months’ calculated indexes are actually used, it’s a decent overview. Read her post here…
Then, in a sidebar titled “Now That’s Interesting,” Ms. Dove opens a brief discussion on how former presidents have historically engaged in “borrowing from the Social Security Trust Fund” to fund military activities. Unfortunately, this is a bit of a myth–one of several–that the AMAC Foundation’s Social Security Advisory Service has been dealing with pretty consistently for a few years now. The term “borrowing” could be construed as accurate, since the Trust Fund reserves are invested in U.S. Treasury securities over which the federal government has control, but it must be remembered that these are legal, interest-bearing investments made by Social Security in federal government operations. As legal obligations, they pay interest to the Social Security Trust Funds, making them a source of income for the program (in 2017, for example, these investments returned $85 billion to the Trust Funds, helping to bring the Trust Fund reserves to nearly $2.9 trillion by year-end 2017). These investments are redeemable by Social Security, and in fact are being redeemed from 2018 forward to cover the shortfall in Social Security income versus scheduled payments. The Trust Fund balances are projected to be sufficient to cover shortfalls until 2034, at which point the program will necessarily decrease benefits to match cash coming in (unless, of course, legislative action is taken to restructure Social Security).
The point of all this is that there is a persistent myth that Social Security’s Trust Fund reserves have been “stolen,” “looted,” or “dipped into” by politicians over the years. This myth has been propagated by pundits, political ads, and friends and neighbors repeatedly, but the facts show that these allegations are untrue. The problems facing Social Security today are a function of simple math…increased lifespans, a declining workforce, and low birth rates being chief factors. What is needed is a restructuring of portions of the program to ensure that Social Security remains solvent for generations to come, and that the across-the-board cut in benefits projected for 2034 (potentially 21%, according to the program’s Board of Trustees) can be avoided. The Association of Mature American Citizens (AMAC) has been aggressively pursuing a resolution to the solvency problem for several years, and has developed a legislative framework that would ensure Social Security for generations to come…we just need congressional action to get it done. Learn more about AMAC’s Social Security Guarantee here…
For further reading on the myths surrounding the Trust Fund issue, check out these earlier Social Security Report articles:
Ask Rusty – Writer disagrees about the Social Security Trust Fund
Notice: The first link provided above connects readers to the full content of the posted article. The URL (internet address) for this link is valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the link’s validity. Also, the opinions expressed in these postings are the viewpoints of the original source and are not explicitly endorsed by AMAC, Inc.; the AMAC Foundation, Inc.; or socialsecurityreport.org.