There is a pop meme on Social Security that the government spend 6x more money on those age 65+ compared to those age 0-17 – and thus, the system is rigged against young people.
That claim uses true numbers – but is based on cherry picking by including only Federal dollars.
Only if you measure Federal dollars. which are funded mostly by state and local taxes, the amount spent on those <18 and those age 65+ is roughly equivalent (without considering payments for things like Medicare Part A via their own payroll deductions).
A related meme is that today’s Social Security benefits are paid entirely by today’s workers, implying that today’s workers are getting screwed.
But that too is highly misleading because that is how Social Security was designed and how it has always worked. This is not new.
Today’s retirees, when they were working directly funded the SS benefits of the the then retirees.
In the 1980s, Congress “reformed” Social Security, raising “full benefits” age from 65 to 67 and increasing payroll deductions, in part, to fund an imaginary “trust fund” to help pay their own future SS benefits. Thus, many of today’s retirees, while they were working, paid for past retiree benefits AND also the trust fund that was supposed to be for their own future.
“The reforms intentionally generated large surpluses in the Social Security Trust Fund by having Baby Boomers pre-pay for their own retirement.
However, by law, those surpluses were invested in U.S. Treasury bonds — meaning the government borrowed the money and spent it on general operations, leaving the trust fund holding IOUs (Treasury securities)”
- Up to 50% of Social Security benefits became taxable for higher-income recipients (later raised to 85% in 1993)
- Federal employees were brought into the Social Security system for the first time
- A 6-month delay in the cost-of-living adjustment (COLA) was enacted
But Congress can’t do math and didn’t understand that the fertility rate had collapsed (see chart, below)- and erected a pyramid scheme that will collapse. The trust fund component is headed to depletion – and then SS benefits become funded again, entirely as direct transfer from worker deductions.
It’s a mess created by dimwits in Congress in the past, and more contemporary Congressional reps that have continued to kick the can down the road.
But the main point here is to correct the record – Social Security has always been a mostly “pay as you go” system, passing contemporary worker payroll contributions directly to retirees. This is not new. It is a fatal design flaw that Congress assumed the future population would grow forever, thanks to arrogant asshole Paul Ehrlich and his incredibly wrong population predictions. (You have no idea how much he influenced wrong policy for decades – that will cost us yet for many more decades.)
Second, today’s retirees paid for both past retiree benefits and to fund their own SS Trust Fund – but inadequately. In effect, they were paying twice but will soon see their own Social Security benefit promises slashed.
Meanwhile, pundits on X continue to assert that this scheme is new and its a plot by “Baby boomers” to screw Gen Z. Sigh.
The fundamental problem is the level of useful intelligence in members of Congress is very low. They have always preferred to play political games than solve anything. As I write this TSA has been unfunded as both parties hold travelers hostage – Congress only cares about Their Party. They care nothing for the people.
