“...all excess funds were to be placed in the general fund and a special interest bearing bond was then given to the social security trust fund.”
And those bonds must be redeemed with current tax dollars. In other words the funds accounting is just a shell game. Today’s recipients are paid from today’s taxes. Futures recipients will be paid from taxes collected at that time.
This makes SS a welfare program. It has rules that make it seem like a pension or trust but the SC ruled early on that SS is whatever Congress wants it be. Spend, create dependency, buy votes, tax.
SS cannot go broke, it cannot be robbed, and it cannot be mismanaged any more so than any other wealth transfer scheme. Politicians current and future will make a political calculation on cost (taxes) vs benefits (votes) and rule accordingly.
SS is much like the fabled gas tax for highway spending.
Agree it is a shell game. It’s the equivalent of me putting a cookie jar on top of my fridge for my kids college fund, putting $100 dollars in it at the beginning of every month, then replacing it with a slip of paper that says IOU $100 dollars with interest and taking the money out to pay bills at the end of the month, when my kids ready to go to college I have to either borrow, sell stuff, or work more hours to pay that back. Of course the government can do something I can’t, print more money.
From my research there were two main reasons they made the law this way; 1)they didn’t trust the stock market 2)economist believed that pumping all that money in the stock market would cause massive problems.