It’s a wealth-losing shame of enormous proportions that Social Security will never go insolvent. It will cost the typical American millions in retirement wealth.
Yes, the absurdity of the notion that Social Security faces insolvency in 2035 is incredibly harmful for all working Americans. That’s because the surest sign future Social Security payments are secure is the insolvency budgetary experts falsely claim looms.
What they miss is that not only were there never individual Social Security accounts, there was no master account for Social Security. Money in, and money out. What Social Security recipients didn’t claim each year in the form of well-below-market returns was simply transferred to Congress where the money was spent.
When the day comes that recipient payments in the form of well-below-market returns exceed what Social Security takes in, the shortfall will be covered by general revenues. In short, future Social Security recipients can count on receiving their well-below-market returns much as present and past recipients have.
Which should truly disappoint every American from the past, present and future. The fact that there was never money segregated into individual accounts, or put into a bigger account signal what’s true: it was never about Social Security in the first place. The program was just a tax increase. Congress wanted and wants more than its headline federal income tax rate, and Social Security is the 89-year-old lie that has kept taxes much higher
Yet if insolvency loomed, Congress would be giving Americans the choice of exiting the program now, and likely before now. Which means Americans would have received substantial tax cuts in the past, or would be receiving them now, with the tax cuts funding real retirement savings. Think about the meaning of this.
The interconnected nature of the U.S. and global economy is of the kind that more and more enterprising individuals are touching the world with their genius than ever. The effect of this happy truth is that right before our eyes billionaire has become the new millionaire of the mid-20th century. And it’s not slowing down.
While left and right continue to fight over which lame political party causes the most inequality (as though it’s a pejorative), the talented and ambitious in the real world continue to create on a level that staggers the mind in contemplation of what’s ahead. Billionaires will be everywhere. Soon enough “a unit” (look it up, it’s a Texas thing) will be the true sign of substantial wealth, with trillionaire not far beyond.
Think about what this would mean for the typical non-billionaire American free of the worst retirement concept ever conceived. Free to expose their income to American enterprise, individuals along with those they work for would get to place their savings twice a month, 24-times a year into investment instruments that exist to track American progress that continues to reveal itself in the form of billionaire multiplication.
Except for one problem: the proliferation of billionaires means federal tax revenues are going way up, not down. Which means Social Security recipients in the future will not just be paid their hideous returns, but with ease. As with all other federal expenditures, the vast majority will be paid for by the rich.
If the rich weren’t overtaxed. Social Security almost certainly would already be dead. But since Democrats and happy talking Republicans implicitly agree that the rich should be annually fleeced, what insults reason (Social Security) gets a forever lease on life that will reveal itself as a forever tax on would-be millionaires who would retire multi-millionaires if they could just escape the worst retirement concept ever.
