Ann Davis is a little bit more optimistic than I am that the politicians in Washington will do the right thing. She a great article in the Idaho State Journal about the the state of Social Security and the huge amount of money owed to our Social Security Trust Fund by the Federal Treasury.
There were no significant Social Security surpluses collected until 1983, when President Reagan signed bi-partisan legislation to increase the FICA payroll tax. He convinced congress and the American people that the payroll tax increase was necessary because “boomers” would start retiring in about 2010: and if action were not taken to build up the fund, payment of benefits could not be sustained. He was right, of course: but the “surplus” money collected through FICA payroll taxes was not set aside to pay benefits. For nearly 30 years it has been spent by the government to pay its bills. Now the trust funds hold $2.83 trillion in Treasuries. Some people characterize that as the government “raiding” Social Security: but the funds are in essentially the same position as any other investor who buys US Treasuries. Surely the government will pay its debt to Social Security, just as it is obligated to pay all its creditors. To continue paying benefits, the Social Security commissioner has said that it will have to begin redeeming its bonds in 2020. That is the very near future. Congress cannot continue to kick this can down the road much longer.
Click here to read more: Social Security needs to be fixed