There is no Social Security. First in the sense that the money paid into the Social Security/Medicare/Medicaid (which I’ll call “social security” for short) system isn’t there — it has been spent. Second, there is no social security in the sense that even if you collect your benefits, it doesn’t provide “social security.” It’s just a check, a small amount of money. (If you want to know what real social security looks like, read about How to Build a Survival Network).
You’d be better off to have kept the money you’ve paid into the system. Then when you died you could leave the rest to your heirs. Instead, if you die before collecting benefits equal to the amount you paid in, the government keeps the difference. Instead of leaving money for your heirs, you’re taking it from them.
You need to be aware of the concept of “unfunded federal obligations.” This is the “fiscal gap,” the difference between how much the government has promised and the tax revenue it has allocated to pay for it. In other words, the government collects social security taxes, but not enough to actually pay for all of the social security checks it’s going to hand out. It’s going to pay out more than it collects, and this is the “unfunded obligation” or “fiscal gap” of the federal government.
The amount of this gap is so huge that the government rarely speaks of it, because if it was too often on the public radar it would create very disgruntled masses. Boston University professor of economics Laurence Kotlikoff has calculated the total unfunded federal financial obligations to be $202 trillion. Understand that this gargantuan sum is over and above the amount that we’re already taxed to pay for these obligations, and yet it represents more than four times the total net worth of all American citizens. Put another way, if the government confiscated all of everyone’s assets, it would pay for only one-fourth of the unfunded obligation. It’s over $670,000 per person in the US. If you have a family of seven, like me, then the government has saddled you with a debt of $4,690,000 in addition to your own debt and tax obligations.
Pause now and think about that for a moment.
Now, I know what you’re thinking. You’re wondering how the government’s going to pay for this? The answer is, it won’t. Social security is simply a legalized Ponzi scheme that has run for six decades, and as we all know, these things always collapse. It’s nothing new; governments have promised more than they could deliver during all the history of man, and the result is always the same.
There are only two possible outcomes; politicians will do the hard thing and renege on the promises, or they will do the easy thing and extend social security as long as they can until it goes down in flames. The easy way means trimming benefits, raising taxes, printing money, or a combination of all three. Guess which one our politicians are going to do.
Any politician who points out how irresponsible this is will be accused of trying to starve your grandmother. He’ll lose the next election and be replaced with another politician who will continue to promise money for your grandmother. They only live for the next election, and they will just keep putting off the inevitable as long as possible, hopefully after the next election.
By the way, this is why our constitution limits the power of the federal government. The founders knew that politicians will always take the easy way out, and they addressed this by providing that the federal government simply had no constitutional power to do anything except the 18 things listed in Article I Section 8. The federal social security program is absolutely unconstitutional, but who cares?
Anyway, there will come a day when we have no more social security program functioning. Don’t rely on it for your future, because it’s going to come apart one way or the other, and it may just bring down our whole economic system with it.