Ever since I could think of such things, I've always had it in the back of my mind: Social Security won't be there for me when I retire. This is a concern for us poor college students who see hundreds of hard-earned dollars flowing out of our paychecks and into the Social Security Trust Fund.

This is because "Social Security Trust Fund" is a misnomer, the product of an elaborate accounting trick. It is not a trust fund in any way, but more of a generational robbery. How the system has worked since we have drawn breath is thus: Money comes in from working Americans and then part of it is funneled into paying seniors their stipends.

In other words, we have a government-mandated Ponzi scheme.

The system leaves some leftovers, or at least has since it was changed in 1983. These leftovers now are put into U.S. government bonds, helping fund some of the deficit spending the government makes on other endeavors. With that system, Social Security funds can make the government feel like it is being responsible and keeping the deficit down when, in actuality, it is spending money earmarked for senior citizens in other ways.

It all works out fine as long as the Social Security payroll taxes bring in more than the Social Security Administration spends, but the latest Congressional Budget Office predictions show the SSA running cash deficits as soon as next year. Then, the predictions give Social Security a temporary surplus from 2012 to 2015, thanks to a predicted increase in revenue of - get this - 6.19 percent in 2012, 5.69 percent in 2013 and 4.59 percent in 2014.

Let's put that in perspective: The revenue for 2009 is projected to decrease by .08 percent. To give you an idea of how ridiculous that is, from 1997 to 2007 the U.S. gross domestic product per capita has increased on average 1.8 percent per year. Assuming that that GDP increase translates directly into wage increases, that would still be an overestimate of the haul from Social Security taxes, because Social Security only taxes the first $102,000 of each employee's paycheck, but nothing on the rest.

In order to see 6.19-percent growth the CBO has predicted, we need to see the economy grow at a rate of more than three times than it has during the past decade. I find it a little hard to imagine that right now.

Now, if the CBO is being a little too optimistic, that means Social Security will be running a cash deficit from next year until the end of time. The federal government will get to move Social Security over from the black to the red and the deficit will slowly start reflecting the real values and very real problems our government has with fiscal responsibility.

We have a nation that is aging as baby boomers near retirement, and Social Security is going to start running a cash deficit next year. Sounds like great fun, doesn't it?

Just last year, the CBO reported Social Security would stay in the black for another decade. Now the old CBO director is in the Obama administration as the budget director, making his fantasy world the official Obama administration "reality," and the CBO has come back down to earth.

These days are hard times with the financial strain from last year's crisis. Social Security is about to go into the toilet and what is our wonderful federal government doing? Debating health care.

It is about time the government started fixing their mistakes with quagmires like Social Security rather than creating new problems.

I'd like to be able to afford food after I retire. How about you?

-Frank Male is a senior in physics and political science. Please send comments to opinion@spub.ksu.edu.

Comments

5 comments

Your name

Fri Oct 30 2009 10:36

Great article. Hopefully students will realize that while they will have to continue to pay into Social Security, they should not count on it for themselves. So what to do? Start investing in 401k's (when you get a job that offers one), Roth IRA's, IRA's and taxable accounts for yourself. Be self-reliant. If you know that in 40 years, when you are ready to retire, you have rely on money you saved on your own, you can start planning for that now. If, in some miracle, you do get Social Security 40 years from now, that will be icing on the cake.

Your name

Sat Oct 17 2009 08:11

That sucks.

Christian Shultz

Sat Oct 17 2009 00:25

This is WHY the government is trying to promote healthcare:

When the advancement of medical science accelerates, we will eventually reach an advancing point where our life expectancy will increase by over one year for every year that elapses. The healthcare bill will cause that to materialize quicker.

If life expectancy increases by over one year every year, then we will have achieved clinical immortality. At that time, the government will declare that we have no NEED to retire! We will keep working our tails off 'til the end of time itself, because we will stop dying of natural causes, so there will be no point to fund a Social Security retirement fund. The government is deliberately engineering a valid pretext to discontinue that fund.

We should still be able to retire anyhow because I want to play World of Warcraft full-time when I'm 65. (No, I don't even subscribe to WoW in college. I need to stay academically afloat, you know!)

Baby Boomer

Fri Oct 9 2009 23:10

Frank,

Thanks for such an insightful and well reasoned piece.

I'm making this comment from my desk as a recent SS recipient that has paid into "the system" for some 44 years as a paperboy, busboy, lifeguard, factory worker, machine repairman, soldier, air traffic controller, and architect. It all happened so fast and will for you as well.

Less than a year ago I started to recieve MY benefits. MY benefits, because I feel it's truly what I earned, in those 44 years. But as we both know, it's YOUR money not mine that makes Social Security solvent.

It was never intended to be that way and shouldn't .

Let's change things it's never to late. You've got a good grasp of the problem. A perfect place to start - understand the problem - find the solution.

Get rid of the crooks in Nov. is a beginning.

Thanks again for your awareness,

B. B. Boomer

Allen W. Smith, Ph.D.

Fri Oct 9 2009 20:23

Dear Frank Male,

As a former college professor, I applaud you for trying to alert college students and others to the great Social Security fraud.

For the past 24 years, under four presidents, every dollar of surplus Social Security revenue, generated by the 1983 payroll tax increase, has been used like a giant slush fund to finance tax cuts, wars, and other government programs. Not a penny of it has been saved and invested, as required by federal law. On January 21, 2005, David Walker, Comptroller General of the U.S. Government Accountability Office (GAO), said, "There are no stocks or bonds or real estate in the trust fund. It has nothing of real value to draw down.

I have been researching and writing about Social Security financing for the past 10 years, and my latest book, "THE BIG LIE: How Our Government Hoodwinked the Public, Emptied the Social Security Trust Fund, and caused The Great Economic Collapse," was just released on August 1 by Ironwood Publications. I have posted the first and last chapters of the book, along with excerpts from all other chapters, on my website at thebiglie.net. I invite everyone who cares about the future of Social Security to visit my website and help spread the news about the empty Social Security trust fund to the public at large.

When I appeared on CNN with Lou Waters on September 27, 2000, he referred to me as "a voice crying in the wilderness." I have continued to be such a voice ever since. I am desperately seeking the help of others in my crusade to alert the public to the great Social Security fraud. Please visit my website at thebiglie.net and consider helping to spread this crucial message.

Allen W. Smith, Ph.D.
Professor of Economics Emeritus
Eastern Illinois University
Website: thebiglie.net

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