Tag: social security

The young do not think about getting old, and this is to the greatest benefit of governments which spend and inflate younger generations out of any future subsidies they might one day come to rely on. For most people in Gen Z, though, there is at least a tacit acknowledgment that they are paying into a system that might not be there for them when they retire. However, their only point of reference is usually the rantings of their socialist college professors or a mob of crazed activists on TikTok.

So, naturally, the only solution they can come up with is MORE power for government, more taxation, more communism and more redistribution of wealth. In other words, give more control and more cash over to the state which already misspent their money.

The idea of pillaging the wealth of others as a shortcut to security for a single generation is not new. This plan is doomed to fail, as it has failed in nearly every socialist system with a population larger than around 10 million people.

Even in “market-capitalist welfare states” that are often cited as “successful” like Norway, Sweden, Denmark and Finland, the ability to continue retirement funding at a rate which provides a livable wage is only possible if the retiring population is much smaller than the working population.

Across the west at present, the larger Baby Boomer generation is aging completely out of the labor pool and these systems are being depleted rapidly. The demographic squeeze is tightening and in the US, those special Treasury securities are now being redeemed – Social Security is set to decline starting in 2034.

Current SS reserves are at $2.56 trillion. These reserve funds are being depleted every year by a spending deficit. The deficit is not fixed and fluctuates wildly, but the overall trend shows it is clearly growing. In 2025 the shortfall was $160 billion (that’s the amount of extra money the government has to tax or borrow in order to fully cover the costs of Social Security beyond normal revenues). That deficit is projected to rise to $393 billion by 2033.

As these reserves disappear due to deficits, eventually social security payments will be reduced as a consequence.

By the time I am old enough to collect, Social Security payments will be cut by 22% (accounting for steady inflation). By the time Gen Z is old enough to collect, their SS payments will shrink by 35% with inflation included. The fund does not necessarily implode but the benefits will becomes more and more useless over time.

At bottom, the fund will be dead because it will no longer be able to adapt to inflation. Costs will continue to rise and SS will shrink exponentially. Relying on the system for retirement would be impossible. This is also assuming there is not an economic crisis event in the future which completely derails government funding for SS much sooner.

This brings up a lot of questions…

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If you take a look at your last pay stub, you will find a line marked OASDI. It stands for Old-Age, Survivors, and Disability Insurance, which is the formal name for Social Security. The tax on that line is 6.2% of your wages. What you do not see on that stub is that your employer paid a matching 6.2% of your paycheck directly to the U.S. Treasury. On a $60,000 salary, those two halves equal $7,440 a year. Exactly $0.00 of it went into an account bearing your name. Every single penny went out immediately as a check to a current retiree or a disabled American.

The entire system rests on a beautifully simple, multi-generational promise: Today’s workers carry today’s retirees, and tomorrow’s workers will carry us. For decades, more money came in than went out. But instead of saving the surplus, Washington borrowed the extra cash, spent it on daily government operations, and left a stack of non-marketable IOUs in a drawer. Federal bureaucrats call that paper a “trust fund.” In reality, calling it a trust fund is like putting an IOU in your kid’s piggy bank and telling them their college tuition is fully funded.

Since 2021, the program has paid out more than it takes in. To cover the shortfall, the government has been cashing those IOUs, forcing the Treasury to borrow massive amounts from the public. By 2034, the drawer for the combined retirement and disability funds will be completely empty. By law, that means every retiree’s check will instantly face a devastating 17% automatic haircut.

Enter Brian Poindexter, the Democratic candidate for Congress in Ohio’s 7th District. He claims he can fix it. Today, the Social Security tax stops once a worker earns $184,500 in a year. His plan calls for three dramatic shifts: remove that income limit so high earners pay on every dollar, let people collect full checks at a younger age, and make the checks bigger. Removing the cap, he confidently promises, “will instantly make it solve.”

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