When questioned about the future of Social Security by the Senate Finance Committee, Treasury Secretary Janet Yellen admitted that Biden “doesn’t have a plan.” There could be no possible plan for an ongoing Ponzi scheme that will fail once the fund runs out of money.
Estimates believe Social Security will reach insolvency before 2034. “I don’t have that computation to offer you,” before saying, “The president doesn’t have a plan. He has principles.” Principles do not put food on the table.
Of course, lawmakers immediately look at raising our taxes. “I’ll note that there’s already been $4.9 trillion in new taxes proposed for those making over $400,000 a year. It seems to be the go-to place, fill in the blank, we’re going to tax those over $400,000 a year for whatever,” Sen. Bill Cassidy, R-La., told Yellen. “Of that $4.9 trillion, none of that has been dedicated to Social Security.” We are raising taxes to fund extravagant climate change packages and wars. None of the money we give to our government goes back into the community.
The likelihood of Social Security remaining as it is today is ZERO. There is more likely to be a huge split in interest rates from the private sector compared to the public at the federal level.
As I have stated before, I donated my time to work with Congress back in the ’90s in an attempt to reform Social Security, transforming it into a wealth fund that was allocated out among managers. I was even shuttling between the Chairman of the House Ways & Means Committee, Bill Archer, and the House Majority Leader Dick Army. I argued for the privatization of Social Security to allow it to become a wealth fund and allow it to invest in equities. The Democrats would not vote for it, so this is why Social Security today cannot survive. Social Security invests 100% in government bonds, meaning it does not even earn a fair interest rate.
The Democrats painted this private investment as “risky,” and they voted against it. So, Social Security invests 100% in government bonds. Let’s see. The Fed lowered the interest rates to “stimulate” the economy. The net effect is that Social Security is simply a slush fund with no possible economic growth. The loss has come at the “opportunity risk” of leaving the money in bonds.
I laid out the structure for allocating money according to the track record of the manager. I was doing this because I had no interest in managing money of this nature. The Democrats wanted to replace the fund managers at will when they retook the majority. I explained that this decision should not be political. I did not care if the fund manager voted Democrat or Republican. That just never sunk in. Had Social Security simply become a wealth fund as so many nations around the world have adopted, it would NOT be in danger of a financial crisis today.
Now, I do not believe they will stop paying Social Security, but they could reduce payments and continue raising the age at which recipients may receive benefits, especially since the average life expectancy for Americans is on the decline. Take Venezuela for example. They honor their pensions, but what you get today will buy only a cup of coffee. Yet another major government-created crisis that could have been avoided.
