Social Security: The Illusion of Retirement Security

Let me start by saying, this article is likely to be unsettling to many Americans, but it contains the TRUTH. 
A THRUTH that we cannot shy away from if we are to fix the issues we have in front of us as a country.  So let's dive in!

No Trust Fund Exists

While most American believe the illusion and falsity that Social Security is a personal retirement savings account, where payroll taxes are saved and accrue interest, this is a misconception. It operates as an intergenerational transfer system, with current workers fund current retirees, resembling a government-run Ponzi scheme. No individual trust fund or dedicated savings account exists, despite claims of "contributing" to retirement. The Supreme Court's decision in Flemming v. Nestor, 363 U.S. 603 (1960), confirms this. Ephram Nestor, who paid into the system for years, lost his benefits after deportation. The Court ruled that benefits are not property rights or contractual obligations. Justice Harlan clarified that Social Security is a welfare program funded by taxes, with Congress free to modify or eliminate benefits. Payroll taxes are not deposits; surplus funds are loaned to the government for non-marketable Treasury securities, IOUs that future taxpayers must cover.

Constitutional Basis and Overreach

Social Security draws authority from the General Welfare Clause, Article I, Section 8 of the Constitution, allowing Congress to tax and spend for the "general welfare." The Court upheld the Social Security Act of 1935 in Helvering v. Davis, 301 U.S. 619 (1937). Shareholder George Davis challenged the Act, but the Court, in a 7-2 decision, deemed old-age benefits a valid response to elderly poverty during the Great Depression. Justice Cardozo argued the crisis's national scope justified federal action. However, this expansive interpretation diverges from founders like James Madison, who favored a limited reading of the clause. The "trust fund" holds only government promises, not assets, redeemable through future taxes or borrowing, as noted by the Tax Policy Center and Cato Institute. This raises Tenth Amendment concerns, as federal intrusion into retirement displaces private savings and state solutions.

Progressive Roots and Expansion

Initiated by Franklin D. Roosevelt, a far-left Democrat, the Social Security Act of 1935 was framed as insurance but designed as a pay-as-you-go system. Early beneficiaries received far more than they paid, supported by a 1945 worker-to-beneficiary ratio of 41 to 1. Lyndon B. Johnson expanded it through the 1965 Social Security Amendments, adding Medicare and Medicaid. Barack Obama continued this trend, expanding Medicaid via the Affordable Care Act in 2010 and proposing benefit increases in 2016. These Socialist policies turned a modest safety net into a sprawling entitlement, burdening future Americans.

A Demographic and Fiscal Crisis

Demographic shifts expose the system's flaws. The worker-to-beneficiary ratio fell to 2.7 to 1 in 2023, down from 5.1 in 1960, and will decline further as baby boomers retire and birth rates drop. The 2024 Social Security Trustees' report projects the Old-Age and Survivors Insurance Trust Fund will deplete by 2033, triggering a 21 percent benefit cut without reform. This Ponzi-like structure, favoring early participants, is inequitable and unsustainable, relying on future taxes or debt.

What is The Path Forward?

The nation faces a stark choice: reform or collapse. Social Security's growth, enabled by a broad General Welfare Clause, challenges the Tenth Amendment's reservation of powers to the states. Reforms like raising the retirement age, means-testing benefits, or shifting to private accounts align with Flemming v. Nestor's affirmation of congressional flexibility. Failure to act risks crushing debt or inflation, undermining the Constitution's promise of limited government. Policymakers must confront this Socialist-born entitlement to secure fiscal stability and economic freedom.

Americans are faced with a truly daunting decision.  One that I doubt we have the intestinal fortitude to make. One that leaves us in a situation that, due to years of political lies and empty promises, in a hopeless and impossible situation, without any real answers.  One that will literally cripple our senior citizens who rely on social security for basic necessities.  Many whom have nothing else or no-one else to rely on. 

Let us know your thoughts!  What do you think should be done?  Do you have a plan for your retirement that does not include Social Security?  If you are on Social Security now, what would you do if it ended next year?

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