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Biggest Social Security Lie: Government Stole the Money

lawmakers social security benefits medicare government“The bigger the lie, the more it will be believed,” Nazi Propaganda Minister Joseph Goebbels said. What could this possibly have to do with Social Security? Sadly, a lot. Scarcely a week goes by that either myself or one of my colleagues does not read a post or get an e-mail from someone expressing their utter outrage that the federal government has spent all the extra Social Security money accumulated over the years. And on what do folks think the supposedly stolen funds were spent? It runs the gamut, but wars, congressional pensions, and the Peace Corps are among the top three oft cited.

This must be stated as emphatically as one possibly can, so here it is-the federal government has not taken a dime from Social Security and spent it on anything other than Social Security benefits.  Period.

Of course, it’s foolish to try to convince someone who has already been persuaded otherwise.  So, perhaps a test is in order.  Question: has anyone’s Social Security monthly benefit check actually decreased in any month this year over last?  Answer: no.  The reason is that all of the past Social Security payroll taxes which have accumulated have been invested in special issue U.S. Treasury securities yielding about two percent.  It is precisely these funds that are now being used to cover the shortfall in Social Security.

Social Security’s shortfall is serious, but not because funds have been stolen.  The program ran a deficit in 2018, and it will do so every year into the future, barring congressional action.  The deficit is purely a demographic phenomenon.  Simply put—

people are living longer, and families are having fewer children.  Thus, there are currently fewer workers contributing payroll taxes relative to those collecting benefits than at any time in the history of the program.  This is problematic, as the surpluses will be exhausted in 2034 according to The Social Security Trustees.  It could be earlier with a deep recession.

Social Security is 83 years old.  The average life expectancy when the law was enacted in 1935 was about 65 years of age.  In other words, most people collected monthly checks for just a few years.  But life expectancy is now in the mid-80s, and record numbers of Americans turn 100 each year.  To collect a monthly check for 30 years or more is not uncommon.  The program was simply never set up to deal with this.  The full retirement age was increased just one time in 1983, and by only two years from 65 to 67.  Early retirement has remained at 62, a number hardly considered “old age” like it was nearly a century ago.

Where do we go from here?  For starters, Social Security must be preserved and modernized.  Sixty three million people receive benefits.  Every beneficiary will receive a catastrophic cut across the board of 21 percent in just over a decade without any action.  By law, Social Security can only pay benefits commensurate with its income, and it will only be able to pay about 79 percent of promised benefits starting in 2034.

The good news is there is still time to modernize this important but dated program.  AMAC has devised a solution that does not raise taxes, as our belief is the problem is not that Americans are taxed too little.  By making modest adjustments in cost of living calculations, small changes affecting the highest 50th percentile, and increasing the retirement age to reflect reality (no current retiree or near retiree would be affected), the program can be made whole again and stave off the insolvency projected in 2034.  Read more about AMAC’s plan here.

To reiterate, the next time you hear someone saying, “The government stole Social Security money,” remind them this is patently false.  If the surpluses had been spent, monthly benefits would have already been sliced.  And there’s another myth out there that states, “I’ll never get back what I put into Social Security from all the years I worked.”  Truth: the average person gets back all he/she ever put in plus a nominal rate of interest in about six years, but that’s the subject a future article.  This generosity of Social Security, of course, is also part of the program’s long-term funding problem.

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Edmond VanDerGinst

I wonder what rock Jeffie has been living under? The Congressional record proves the opposite of his surmise, dating back to then President,Lyndon Baines Johnson, who initiated the first “borrowing” of soc. sec. funds. It’s not borrow if there is no attempt to pay it back. As for paychecks not being decreased, that may be true but, they are nowhere near the amount they should be (estimated to be 3 to 4 times what they currently are). Think again Jeffie. I’ve been here since FDR created this monster.

G. Welsh

What effect did the democrat change have on it when in or around 1963 they took it out of Social Security funding and put it in the General Fund. This was around the time the Viet Nam war was starting to kick into high gear. I’m not saying that any of the money went into that but it sure sounds fishy. I do know that that is when those that did not put anything into it started get money out of it. That also puts a burden on it. Also it is government run and jokingly monitored. That makes me wonder how much is being stolen by illegal payouts just like what’s going on with ‘Medicare. I know one thing that would fix it real quick. Take congress pension away and put them on it like they are supposed to be.

Alan Fraize

they have been stolen giving benefits too illegals. I Would say that’s stealing

Eve E.

Jeff: it’s called a Ponzi scheme. When you take money from someone, with a promise to pay out a dividend after a certain period of time, and then do something else with that money.
Such as: paying it out to people who have never paid in to it.
Such as: using it as welfare and disability insurance.
Such as: Making it mandatory & not allowing one to opt out or the freedom to remove their money.
IT’S A PONZI SCHEME TO THE “T”. It’s criminal and corrupt socialism at it’s worst!
PS: Bravo Mr. VanDerGinst – great post!


“STOLEN” is legally incorrect; a more accurate term would be “MISAPPROPRIATED”>>Congress has “BORROWED” SS funds for years for a number of frivolous pork~barrel projects, and have no intention of paying it back. Legal challenge to this practice survived with a shameful Supreme Court decision in 1960. Flemming vs. Nestor held that SS reserve MAY be used for general appropriations, in effect sanctioning wrongful use of wages withheld by Uncle Sam, SUPPOSEDLY for benefit of all wage earners EXCEPT 535 people: CONGRESS!! It should be noted that CONGRESS does not participate in SS system>>SURPRISE!!! If they DID SS deficits would be fixed before you could say “FILIBUSTER!!” Just another example of Congressional elitism!

Dave Richards

Jeff, you couldn’t be more wrong. The Federal Government has raped and pillaged our Social Security fund and just this past year, they have cut both my wife’s and my benefits. Do you work for the Feds, because you sure sound like they’ve hired you to do a PR piece on Social Security.


OK – I’ll accept what has been said here – but it is actually an inadequate article. Why is there any term such as “Social Security Trust Fund”? What laws were changed in the 60’s & 70’s that have lead to IOU’s instead of actual cash-in-the-bank for this program (Social Security)? Doesn’t SS now include more than retirement benefits? For example there is a small (less than $300) payout for the actual death of a person. Aren’t people who have never paid into the system getting benefits paid to them too? What about the fraud on this system (e.g., children collecting the benefit of their parents, after the parent dies)? Additionally, if the explanation is as simple as stated in this article, a simple graph would show the intake and outgo – which would make the “problem” more easily understood. What does ring true is that I have taken my… Read more »


It is my understanding that benefits are being paid to people that did not contribute the “Social Security insurance” premium” & / or to non-citizens . Also that money was recatagorized to or borrowed by the Obama admin. I heard that Obama also took Medicare monies to help pay for Affordable Health Care Act (aka Obamacare” Socialized medicine plans) from the Medicare Insurance PREMIUMS paid by working citizens …. again giving Obamacare to people that did not pay in to the system &/or non-citizens
These were both called INSURANCE NOT BENEFITS…. this is called “fraud” aka LIES


Sorry, Jeff. You’ve got it totally wrong. Those funds were not “invested” in Treasury securities – they were BORROWED by our government, and we have to borrow to pay them back. The money has gone elsewhere to fund government, but it is backed by the “full faith and credit” of the U.S. government, which is worth less and less as we become more deeply mired in debt.

Robert S Irwin

Ponzi scheme is the first thing that comes to mind with social security. It takes people paying into the program to keep it going. The investment in government bonds is bogus. The proceeds of government bonds gets consumed running and expanding government that creates no products and no profit. The antithesis of government bonds is corporate bonds where the proceeds are used to create new wealth by investing in new products and processes. Bottom line, if you’re counting on SS as your sole source of income, you’ve made a drastic mistake. Counting on government for your welfare is the definition of insanity.


What do you call taxing the SS benefits if not a reduction in benefits?


Wrong….Social Security was in a fund all by itself and had it been in that fund instead of the general monies that LBJ took out and put into the general fund….during the 80’s and early 90’s, it would have enjoyed interest of 10% instead of the meager 2% now. The government has “borrowed” from the fund issuing Treasury securities (IOU’s) to the Social Security Funds. And the government has used these funds for other things than just social security….unemployment, disability (which so many use to stay at home instead of working). While you ay not agree, using social security for ANYTHING other than issuing checks to the elderly is called stealing.

Tom Collins

In addition, put all federal employees including congress into the SS system and you will see it become solvent over the weekend!

Lew wyble

How are disability payments tied to Social Security dollars?

michael failla

What part of ponzi scheme do you not understand? Sure make small changes to reflect present day demographics however, money put into social security should be for social security only and not ever put into general fund. To do otherwise is looting.


For those that are not aware of the tax reform bill called The Fair Tax, it would fund SS and the rest of the govt. needs. Along with putting your full paycheck into pocket, the IRS will be eliminated the dreaded April 15th.
AMAC would be a great orgiazation to help promot the the Fair Tax….more info at HR 25…it really is so simple, the only thing needed is the People to demand it from their congressman.

Robert Mosler

You really think the $’s used to buy the bonds we’re put in a fund to pay back in the future? I feel those funds were spent and the bond are the IOU’s

Dan W.


Tom Collins

Yest the US did not steal SS money, they did borrow with no intent on paying it back. Did the same thing to USPS under Clinton, only no intention of paying that back.

Thomas Willis

Not what my Congressman has been saying.