Facts, Falsehoods and Fraud Concerning Social Security
by Region 8 Webmaster John Davis
There is a lot of misinformation going around about Social Security, with the bulk of it coming from Elon Musk. Owning a social media platform doesn’t give someone the right to promote lies about an agency that has for 90 years kept seniors out of poverty. Let’s look at the facts about Social Security.
On October 24, 1929, the Stock Market crashed sending the United States into the Great Depression. Unemployment numbers stood at 25% and real wages in the country declined by 40%. From 1929 to 1932, over 15,000,000 Americans had lost their jobs. In his nomination for President, Franklin Roosevelt stated “I pledge to you, I pledge to myself, a new deal for the American people.”
The New Deal was a group of bills, aimed at jumpstarting the economy and pulling the United States out of a crash that was caused by the wealthy gathering everything at the top. Fascism was on the rise in the United States and with it came excesses for the rich and powerful at the expense of the working class. The New Deal was aimed at undoing the disasters of the past decade.
In 1934, President Roosevelt created the Committee for Economic Security, comprised of five cabinet officials who had been vetted and approved by the Senate. After an extensive six-month study, the CES presented their results to President Roosevelt. The President in turn delivered this address to Congress “Security was attained in the earlier days through the interdependence of members of families upon each other and of the families within a small community upon each other. The complexities of great communities and organized industry make these simple means of security. Therefore, we are compelled to employ the active interest of the Nation as a whole through government to encourage a greater security for each individual who composes it . . . This seeking for a greater measure of welfare and happiness does not indicate a change in values. It is rather a return to values lost in the course of our economic development and expansion.” The President asked Congress to act and signed The Social Security Act into law on August 14, 1935.
Social Security was established as an insurance program designed to provide income security for the elderly. As an insurance program, the system was based on the idea that the many would contribute some so those in need of the program could benefit. When you buy insurance on your home, you are contributing to a fund that allows those who suffer a catastrophic need to be able to share that risk with everyone in the fund. We pay into home and auto insurance, hoping we never need to use it. With Social Security, all workers contribute to the fund that disperses funds to those who reach retirement age (depending on when they were born) and provides benefits for spouses and minor children of a Social Security member who passes away or becomes disabled.
Currently, there are about 183,000,000 workers paying into Social Security and 70,000,000 receiving benefits. To be eligible for Social Security, you MUST have a Social Security number and have contributed to the fund. It is an insurance policy, so to be eligible for benefits you must contribute. Every hour a person works, they contribute 6.2% of their income to Social Security. Their employer matches that amount, which goes into the Social Security Trust Fund. These are pass-through funds, which add nothing to the government funds or cost nothing to the national budget. Social Security is a separate account that isn’t funded by the federal government but by workers.
Since its inception, Social Security has collected more than it has paid out. Periodically, Congress has made adjustments to meet the needs of the program. Following World War II, the population increased, while adding more workers contributed, creating a situation where down the road the number of people receiving benefits would increase. The Social Security Trust fund grew and was invested in Treasury Bonds. From time to time, Congress has “borrowed” money from the Social Security Trust Fund. Currently, the amount of money the government owes Social Security is $2.6 trillion dollars. About 10% of the national debt is money owed to Social Security. As the percentage of workers contributing to Social Security and the percent drawing benefits shifts, the surplus in Social Security draws down and reaches the point for Congress to act.
Elon Musk has been spreading lies about Social Security. He said people who are 150 are collecting benefits, implying the system is being scammed. A person would have to have been born in 1875 to be 150 years old. That would mean they would have been 60 when Social Security was passed in 1935. A person builds credits as they contribute to Social Security. A 60-year-old person in 1935 would not have been able to build enough credits before they retired to qualify for Social Security. When a person is put in the system, if they can’t verify their birthdate, they are assigned an age of 150 until their birth date can be verified.
So, if Social Security doesn’t add to the deficit and doesn’t cost the government, why do the Republicans want to cut Social Security? It is the $2.6 trillion they owe Social Security. Currently, House and Senate Republicans are preparing a budget that gives $1.8 trillion in tax cuts to the wealthiest 5% (those making $321,000 or more). A budget is both expenses and income. They plan on reducing income by almost $2 trillion, given to the wealthiest Americans, and plan on paying for it by cutting services that protect the most vulnerable in society. If they give another $2 trillion to America’s wealthiest, how do they repay the $2.6 trillion they owe Social Security? Musk talks about fraud when the real fraud is the lies he is telling about government spending. To keep from paying the debt they owe to Social Security, they had rather take your earned benefits and give them to people with vacation homes around the world, yachts, private jets, and emerald mines in South Africa.
The largest single increase in the national debt occurred from 2017-2021 during Trump’s first term. Of the $33 trillion of our national debt, $8.3 trillion occurred from 2017-2021. The bulk of that came from a round of tax cuts to the wealthy that are set to expire. The current attack on Social Security and our social safety net is simply to renew and expand these tax cuts.
You can fight back- call your elected representatives and tell them you will NEVER vote for any official that votes to cut Social Security benefits. Only pressure on the House and Senate can do any good at this point. Donald Trump and Elon Musk do not care what you think.
Social Security Fact, Fiction, and Fraud
Facts
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For 2/3 of retirees, at least half of their income is from Social Security.
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For 1/3 of retirees, Social Security is 90% of their income.
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Social Security doesn’t cost the federal government a cent.
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Social Security has collected more than it paid out since its inception.
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The wealthy contribute a much smaller percentage. Social Security stops being withdrawn from wages at $170,100. 90% of Americans make less than that
Fiction
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Illegal immigrants are drawing Social Security– False no one can draw Social Security or any other benefit from the federal government without a Social Security number.
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Social Security is broke. False – The Social Security Trust fund has over $2.8 trillion in assets and is owed another $2.6 trillion by the federal government.
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Social Security is a Ponzi scheme– False – Social Security is a functioning business model that has prevented seniors from living in poverty for 90 years. A Ponzi scheme would be something such as Trump University, Trump Airlines, or Musk Bitcoin.
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Dead people are drawing Social Security – False- A funeral home will fill out for SSA – 721 for every person they bury.
Fraud
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Claims that Social Security is adding to the national debt, simply to keep from repaying the money owed to Social Security so you can use the money as givebacks to the wealthy.
