1. Of all the deceptive sales techniques the U.S. government has used on the American people, one of them—the Social Security Act—gets far too little attention. Buckle up because this is a wild ride.
2. In 1935, the American people were sold a bill of goods. They were told, “Pay into this system, and it’ll be YOUR money for retirement.” Sounds great, right?
3. But here’s where it gets juicy, in a really ugly way. Two years later, when the Supreme Court was considering the constitutionality of the Social Security Act, the government did a complete 180.
4. The government—through Assistant Attorney General Robert Jackson—argued in essence, “Oh no, this isn’t YOUR money at all. This is a TAX, and we can do whatever we want with it.” Classic bait and switch.
5. Let’s not forget the ruling in Helvering v. Davis, where the Supreme Court upheld the Social Security Act by embracing the government’s argument / admission that what people pay into Social Security is tax revenue—available to be used as Congress may direct—and not at all money belonging to those who paid it.
6. So, to summarize: the proponents of the Social Security Act told American workers that what they paid into the system would remain *their* money, not the government’s—to get Congress to pass it—and then told the courts the exact opposite when defending the Act’s constitutionality. The Supreme Court accepted the government’s argument, to the great detriment of the American people.
7. Now, let’s talk about what happens to “your money” once it’s in the government’s hands. Spoiler alert: it’s not managed like your IRA or 401(k).
8. First of all, this money doesn’t sit in a nice, individual account with your name on it. No, it goes into a huge account called the “Social Security Trust Fund.”
9. But here’s the kicker—the government routinely raids this fund. Yes, you heard that right. They take “your money” and use it for whatever the current Congress deems “necessary.”
10. Every few years, there’s talk in Congress about “saving Social Security.” I’ve introduced and cosponsored a number of measures over the years that would fix it. But most in Congress show little desire to fix it, and are instead constantly looking for ways to “borrow” from it—with no plan to put it back.
11. And the returns? Forget about compound interest or stock market gains. Your “investment” in Social Security can give you a return lower than inflation.
12. If you had put the same amount into literally ANYTHING else—a mutual fund, real estate, even a savings account—you’d be better off by the time you reached retirement age, even if the government kept some of it!
13. Do the math: with Social Security, you’re looking at a return that’s pathetic compared to market averages. It’s not even an investment; it’s a tax.
14. And let’s talk about how this system is set up to fail. The demographic shift? More retirees, fewer workers. It’s almost fair to compare it to a Ponzi scheme that’s running out of new investors.
15. Every dollar you pay into Social Security, only to see it gobbled up by the government itself, is a dollar you can’t invest in your own future. It’s government dependency at its worst.
16. Remember, this isn’t just about retirement. It’s about independence, about controlling your own destiny. With Social Security, you control nothing.
17. The government promises you security but gives you dependency. It promises ownership but gives you a tax receipt.
18. And don’t get me started on the management. The Social Security Administration is a bureaucratic behemoth, not exactly known for its efficiency or innovation.
19. If you think your money is safe there, you’re in for a rude awakening. The mismanagement, the waste, the deception—it’s all on display.
20. So, what’s the solution? We need real, genuine reform. Within the Social Security system, Americans should be able to invest in their own future, and not be shackled by the worst parts of this outdated, mismanaged system
21. It’s time we acknowledge the truth: Social Security as it now exists isn’t a retirement plan; it’s a tax plan with retirement benefits as an afterthought.
22. We were sold a dream, but received a nightmare. It’s time for a wake-up call. We need real reform.
23. It’s time for Americans to know the true history of the Social Security Act. The more people learn the truth, the more they’ll start demanding answers, options, and real reform from Congress. Please help spread the word.
24. The history of the Social Security Act—which sadly must include the deceptive manner in which it was sold to the American people—is yet another reason why America’s century-long era of progressive government must be brought to a close.
Start with not giving and using it for people who don’t deserve it.
Social Security is, and always has been, a welfare tax for old people. The main problem with it is the larger societal problem that our fertility rate is falling while old people are living longer, so we won’t have enough young people to take care of the elderly.
Don’t forget that prior to 1984, Social Security wasn’t taxed. So, if it was sold as a tax and is now being taxed, we are being double taxed on it. It’s definitely a ponzi scheme. I would rather invest in what I want than trust the government with my hard earned money.
Social Security, Medicare, and entitlements make up 2/3 of the federal budget. They can never be cut. Annual interest on the federal debt is higher than both Defense and Medicare. Trump has his work cut out for him.
Yet bureaucrats will keep screaming “they want to take away your Social Security”, but it’s actually socialist security that grew the Federal government by taxing us in a way we would want (well, some of us). We can do much better with OUR money. Namaste, you can read it here:
Thread by @BasedMikeLee on Thread Reader App – Thread Reader Apphttps://threadreaderapp.com/thread/1863771172485104124.html… Talk to you soon. 
But the individual who borrowed has to pay back the student loan. Even though the increase in paychecks represented by investing in a higher education would mean More Tax Taken Out of that income.
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I genuinely am interested in hearing your thoughts on how we’re going to save it because I’m 48 and my generation isn’t getting it because of these “raids”. It’s going to be insolvent in like eight years. Shouldn’t we be preparing to get it solvent, like, yesterday?
Problem is, what about all the people that are already collecting Social Security and have no other income than that?
Not to mention the implied threat behind arguments for increased in migration all boil down to populating the ever widening base of the social security pyramid scheme. Maybe create a system for every American that runs in the same way as the government’s tsp, or better yet, just allow individuals to join the tsp regardless of their work affiliation, make it portable and allow private employers to also contribute with that as their pension system. Better returns than social security or any 401k / IRA, lower costs, and no one can argue the government is forcing Americans to line the pockets of Wall Street since it will be managed by a trust instead of finance bro parasites. The government can put effective guardrails that prevent people with less financial literacy from blowing up their life savings, or never building it at all, well at the same time providing them more freedom than trash social security would. However I feel the lobbyists and Wall Street that own significant numbers of congress people’s votes, would never allow a positive reform like that to be made. The problem is whatever you do, it will get hijacked from a bad system that doesn’t really help the way it should, to a worse one that becomes a compelled welfare program for the poor, hungry, unloved hedge fund classes.
As a person who, after 45 years of working, is nearing the age deemed as “full” retirement, I know I’ll never be able to live on the pittence allotted to me. Despite maxing out on contributions nearly my whole career, after facing some devastating financial happenings, I’ll be forced to continue working into my 70s just to survive. They have stolen and mismanaged EVERYTHING.
Barry Wendleton @Howardroark69
If you give every American child a trust fund with 10k invested in a mutual fund when they are born, with the condition that they can not withdraw until 65, they will have 1.5M at 8% and almost 5M at 10% . Make provisions for death, etc. But that makes so much more sense to me.
My concern about SS privatization plans—having lived through the stripping of pensions and the stuttering implementation of 401ks—is that they will ignore the needs of people a decade or less from retirement, who don’t have lobbies, in favor of the fully retired & 30-somethings.
I am halfway through my working years and would gladly give up my social security retirement if it meant I got to keep the 12% of my income taken between myself and my employer every year. The Gov can keep the first 20 years of my SS tax.
Well, I demand that the Government return all the money it stole all these years. We’ll take it in installments if necessary. Put a freeze on all pork spending to start with.
1000% agree. That said, if not required to participate you look across the country with a nasty homeless rate because millions wont save. A safety net is required.
They don’t want to save it because each side likes to accuse the other of trying to end it. It’s one of many scare tactics for votes.
Keith McCullough @KeithMcCullough
I started Hedgeye in 2008. Back then, the U.S. economy was suffering its biggest downturn since the Great Depression and we were bearish. The stock market fell over 50% from October 2007 to March 2009. Bullish pundits on , walked A LOT of investors off a cliff. American retirement plans lost ~$2 trillion in the 15 months between October 2007 and December 2008, approximately a 20% decline.
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One hell of a sales pitch by Keith McCullough. Bravo to you. Great communication skills. But J P Morgan and Morgan Stanley and Lloyds of London my investment firms have done better than you. Jump in sometime with the big fish.