Disabled Recipients of Social Security Fund Face Hefty Benefits Cut

[customerserviceguy]

37. Your question

"who's getting all the money" has a simple answer. It's the folks being paid Social Security benefits right now who are getting the money. In order to afford benefits after the trust funds are exhausted (and I make the case that this has already happened, as future redemptions come out of more borrowing) taxes will be raised and benefits will be cut, just as happened about thirty years ago.

As for what baby boomers make, most of us got some employment commensurate with our education level, and those who borrowed modest sums in our youth to make it through higher education were eventually able to pay that back. I really don't know how the twenty or thirtysomethings of today can pay back several tens of thousands of dollars from the $10-12 an hour jobs that all too many of them have. Taking their FICA deduction to ten percent is going to really hurt them, especially with nonexistent wage inflation.

The idea that there is some sort of black hole sucking money out of Social Security and into the pockets of rich people is just a delusion. The whole system was set up as a pyramid, where ever larger generations pay to fund the retired generation, and everybody knew that was the case. When generations grow significantly in size, and/or ability to afford higher payroll taxes (as happened when the baby boomers got hit by the 1980's reforms) then the system chugs along. It's when generation sizes stagnate and pay drops that we find the system starts lurching towards a crisis.