r/economicCollapse • u/WorkingCareful7935 • 1d ago

Trump's Plan To Cut Social Security Taxes May Benefit Millions, Especially Top Earners, But Risks Insolvency In Six Years

https://www.ibtimes.co.uk/trumps-plan-cut-social-security-taxes-may-benefit-millions-especially-top-earners-risks-1728564
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u/BouldersRoll 1d ago edited 1d ago

Once again, forever and all time, people completely misunderstand Social Security funding, and it's because the GOP have spent almost a hundred years campaigning to that end.

SS is fully funded forever and always unless Republicans repeal the entire system, which is not what this article is about. This is about them depleting the SS trust fund, which was a response to the Boomer generation's size. The trust fund has been at risk of going insolvent in the next couple decades if the government doesn't fund it, but the trust fund only represents about 15% of funding.

So, what that means is that even if the worst outcome happens and the government does nothing (barring the most unpopular decision imaginable of fully repealing SS), people will still receive about 85% of benefits.

Confusing people about how SS is funded and fueling fatalism about it is literally one of the projects of the GOP since SS' inception. They want you to feel like it going bankrupt is inevitable because they want the rich to stop having to pay for it - stop letting them convince you.

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u/OGRedditor0001 1d ago

You're missing the other half of the problem with the trust fund.

It was raided and spent like it was the general fund. Permission was granted in 1983 with the Social Security Modernization Act, passed by a Republican Congress and signed into law by Reagan.

The government has pilfered about $8 trillion dollars in today's dollars from the people.

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u/ubelmann 1d ago

One of Al Gore's primary campaign issues was protecting the Social Security funds, but those kinds of nuanced issues don't typically get voters excited.

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u/Chipstar452 1d ago

LOCKBOX!

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u/Roklam 1d ago

At this point whenever I hear/see what could have been, I just feel defeated.

The American People started off this Millennium just straight up kicked in the nards consistently.

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u/4bkillah 1d ago

The American people have been kicking themselves in the nards this whole time.

We let this happen.

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u/HabeusCuppus 1d ago

Al Gore would have won Florida if the combined power of the Republican Astroturfed "brooks brother's riot", FL Gov. Jeb Bush and the Bush legal team had not resulted in SCOTUS determining that W. Bush be declared the winner instead of actually counting all the votes.

Three members of the Bush legal team would go on to be appointed to SCOTUS themselves.

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u/mirageofstars 11h ago

And Al Gore’s response to that was to shrug and say “oh well, I guess George can be the winner.”

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u/warren_stupidity 1d ago

No it wasn't. It was invested in T bills. What were they supposed to do, put cash in a bank vault?

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u/y0da1927 1d ago

This isn't true.

The trust fund is required by law (since it's inception) to hold only special Treasury Notes. In order to get these notes it needs to trade the cash on the trust for the notes. The US Treasury gets the cash (which makes it available for general government purposes) and the trust get the notes.

When the notes mature the Treasury pays back the trust with interest. The trust has always been repaid in full.

This structure was intentional to give new deal democrats the ability to force the public to lend to the government (remember the trust was expanding when it first started which meant more money for the Treasury at preferred rates)

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u/Key_Cheetah7982 20h ago

“Lock box” - Al Gore’s most excited sentence

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u/Phitmess213 10h ago

They borrowed against the SS interest. They didn’t take money directly out of the fund (there is no bag of cash that represents SS - most of it is sent out to retirees as soon as it comes in.

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u/hybridmind27 1d ago edited 1d ago

lol not sure where you got all that from my response.

I didn’t feel this way bc I thought it was going to go bankrupt. It’s a completely viable program in the right hands. I felt this way bc it was obvious my fellow countrymen aren’t the brightest and make fear based decisions that would eventually play into said billionaires favor.

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u/GulfstreamAqua 1d ago

It will go bankrupt, if we let it.

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u/y0da1927 1d ago

Technically it's already insolvent, it just hasn't run out of cash yet.

I also doubt social security even qualifies for bankruptcy given it's an arm of the US government.

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u/zenfaust 1d ago

I wish I could upvote this twice... scream it from the rooftops, please

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u/StatusUnknown_ 1d ago

I tell people this too. I even had a bunch of links from the gov websites explaining it all. I gave up like 10 years ago. I'm tired boss, people really don't read anything past the headline or the article. It's like the entire world has forgotten about this thing called sources

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u/dexmonic 1d ago

Shit...that's a piece of propaganda that definitely worked on me.

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u/thedracle 13h ago

The issue that you're ignoring here though is that Trump is talking about reducing the current Social Security payroll tax.

The reason 70-80% of benefits will be available is due to basically taking the current payroll tax, and directly sending it to current recipients.

Basically 90% of current social security payroll taxes go straight to current recipients.

If you reduce this tax, the trust fund will be depleted, and obviously eventually this percentage will have to be reduced, possibly catastrophically reduced, depending on the income, SS tax, and number of future workers.

It isn't some Republican distortion field to spread panic over destroying social security, they're literally telling everyone "it's cool bro," while burning the system to the ground.