Obama wants to cut Social Security

By Ben Strubel


What Cuts Are Being Proposed?







Social Security Is Remarkably Effective










Why Cuts Are Being Proposed

Three words: Wall Street + taxes.








How Social Security Really Works







[1] 2013 NASI poll

20 responses to “Obama wants to cut Social Security

  1. Excellent post and very enlightening thanks.

    • Ladies and Gentlemen:

      I want my SS money in one payment with compound interest since 1961 ($2,000,000). The Legislative branch and the Executive branch stole the money out of the SS fund and replaced the money with IOU’s. The BS that SS fund is in the black may be true in that the current revenue from SS taxes is in the black, but the SS Trust Fund is empty of original deposits. All legislators and the president that signed into law the raids on the SS fund should be incarcerated until they all pay it back. If I, as an employer pulled such a scam, I would be thrown in the “Slammer” and kept there until [edited by admin].

      [off topic comment removed]


  2. “The changes being proposed are an insidious way of robbing the elderly as they grow older.”

    Not really. Today’s elderly, as usual, will be unaffected. Such a change will affect the elderly of 30 or more years from now. Today’s elderly will be dead by then. Tomorrow’s elderly will be busy dealing with the crumbling infrastructure and low productivity that comes about from lack of investment today.

    • Dr. J. Michael Pece

      While you are partially correct in your assumptions, you are wrong when you state the cuts will not hurt the current social security recipients. If inflation is running at 6% and we get a 1.6% increase or less, we are now living off 4.4% less income. Two/three years ago we went two years with no cost of living increases thus we fell quite behind. Yes those who receive benefits 30 years from now will be adversely affected, the current recipients are already and have been affected by these games with the cost of living increases for years now.
      Now it is going to be worse. By the way, Social Security and Disability are not “entitlements”, they were paid for with our incomes.

  3. Sounds like a bit of a slippery slope. In Canada, the conservative government raised the age for old age security from 65 to 67 years. Two years of lost benefits upfront. The story was this federally funded plan was unsustainable with eligibility set at 65.

  4. So, if I’m reanding your theory to be correct, Mr.Strubel, then it would follow that actually increasing wages and creating new livable wage jobs in and of itself would solve the Social Security/Medicare/Medicaid “problem” by adding new sources of revenue that would be eligible for the FICA taxes that would be transferred into higher benefits. Would I be correct??

    I’m not so sure, though, that you can reduce the FICA tax to merely “reducing the amount of income”, since there are far higher reductions in terms of taxes used to fund everything from excessive defense spending to the surveillance and incarceration systems. Redistribution of income via progressive taxation combined with transferrence of revenue priorities to domestic social spending and public infrastructure could offer as much a benefit to maintaining and keeping Social Security/Medicare/Medicaid benefits as going to fiat currency; and reforms such as Single Payer/”Medicare For All” and replacing traditional welfare programs with a generous guaranteed annual income system that complements a Job Guarantee, could also go pretty far, even before considering cutting or removing the FICA tax

    I do agree, though, that fiat currency can and would be useful in dealing with rebuilding public infrastructure and education. I’m just worried about using it as an all-in substitute for traditional redistribution.

    • Anthony, there are no proposals in this article. It merely describes how Social Security Insurance works *now* irrespective of the semantic games played by terms such as “trust fund” and “getting your money back.”

      SSI as *currently construed* is not a retirement plan. It is an intergenerational assurance program.

    • Mark Robertson

      There is no need for a FICA tax at all, since the FICA tax does not pay for Social Security or Medicare, just as federal income taxes do not pay for the federal government.

      The federal government creates its money out of thin air by crediting the bank accounts of recipients.

      Hence, the federal government does not need or use tax revenue. Indeed, the federal government destroys all tax revenue upon receipt, by eliminating the revenue from the money supply. (Neither does the federal government need to borrow in order to spend. Hence the “national debt” is trivial.)

      The only legitimate purpose of federal taxes is to maintain the overall integrity of the banking and money system. Since taxes can only be paid in dollars, the dollar maintains its sovereign status.

      Social Security/Medicare/Medicaid have infinite money. They have no funding problem. Instead, they have a political problem: the rich want to eliminate or privatize these programs in order to widen the gap between themselves and the masses. Therefore the rich pay politicians to continually attack social programs, falsely calling them “unsustainable” (when in fact they are infinitely sustainable).

      All talk about “solvency” and “trust funds” is nonsense that confuses the masses, and keeps them submissive. No federal program can ever have a “solvency” problem. And as for the SS “trust fund,” can anybody locate it, or prove that it even exists?

      Money for SS does not come from any “trust fund.” It is created ex nihilo, i.e. out of thin air.

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  7. Aloha! Ask any social security recipient and their main concern has nothing to do with how long can the social security system stay solvent, but how long can the recipient stay solvent! I pay into the system using 197o/1980/1990s dollars and when I retire I get 2020 dollars. A huge difference in purchasing power.

    The system started off wrong from the very first beneficiary. Her name was Ida May Fuller:
    She retired in 1939, having paid just three years of payroll taxes. She received monthly Social Security checks until her death in 1975 at age 100. By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system. She later said about going to the Social Security office, “It wasn’t that I expected anything, mind you, but I knew I’d been paying for something called Social Security and I wanted to ask the people in Rutland about it.”

    Ida was on welfare after her second check. Whats that a 92,000% gain on her original investment? Not exactly the perfect model for solvency. Even my own Mother who only worked about three years in her adult life back in the 1970s is getting $900 per month now. She passed her nominal contributions back in 1981. Everyone knows it is near impossible to live on $900 a month in practically any major US city except maybe Detroit!


    The above analysis is very close to the old “company store”! I agree why pay taxes?
    In the old days before social security if grandpa wanted something the family bought it for him. Now the government is the pseudo-family. Uncle Sam takes on new meaning …

    On the US Treasury FY2013 statement it shows total net tax revenues(gross receipts minus refunds) for the year are consumed 100% by only four line items. Social Security, Medicare, Medicaid and Defense Vendors(Vendors only, not total military budget). Tax revenues, whether individual, payroll, estate or corporate make up the majority of deposits into the US Treasury bank account at the Federal Reserve so what makes up for the tax revenue deficit? What funds the other 29 line items? My guess is mostly debt … You cannot fund a 33 line item US Treasury statement on just tax revenues alone. In a “pay-as-u-go” world the US Treasury would have to eliminate a lot of line items, but we don’t have a “pay-as-u-go” world … we have a “debt-as-u-go” (aka: “promise-to-pay-as-u-go”)world. Per the US Treasury the “statutory debt ceiling” is suspended until Feb 7. I would like to see the debt ceiling be eliminated permanently since it is now just a “political photo op”! That is one way to resolve political budget deficit grid lock forever!

    We all know what happens when you hand a politician or any human being a blank check or a blank EBT card. Funding the system was never an issue and every system has inequality. It comes down to who spends your wages better? You or some stranger in Washington DC? Even more than that who is “entitled” to spend your wages? Now that’s “entitlement” of a different color …

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  9. 1.More of my wages are going into social security this year, since the base was hiked up about 3 grand. Jes sayin.
    2.Social security is a grand, fantastic, fabulous deal for non working spouses. This is politically incorrect to point out. Not only do workers get an exemption for this dependent, that dependent can collect 50-100% of the worker’s benefit for life, including divorce events. A crisis of generosity.
    3. The next generation of workers, who will be paying my benefits, are likely to in aggregate be poorer. Unless we have more of them, many more, or the economic growth of this country increases by more than projections, a crisis of cash flow will actually occur. We don’t have a crisis now.

  10. Everybody cries about money. Give me give me they say. Go to the USA and get the free money!

    Good Lord it wasn’t that way when I grew up. Americans, as I was taught as a boy, were hard working folk who took care of themselves and their families and even their dogs, neighbors and those in need.

    Americans were once a strong people. Today, well, can we say different? [edited by admin]

    It is time for Americans to be Americans like those that came before. This will happen, perhaps not with the current young generation. Eventually long after I am dead, I am sure we will see Americans in the future as my generation once saw Americans in the past.

    Not as heroes but only as good people that we are.

  11. I do believe in simplicity, which may be my down fall. In my humble opinion, I believe the age of retirement for SS benefits should be raised, whether it be two years or more is certainly something that should have a serious discussion and implementation.

    My second suggestion is the Government/Politicians NEED to stop with their retirements/benefits being separate from we the people they are suppose to represent! They certainly are no better than we are and are suppose to be there representing US, NOT their own pockets!

    Simple statements and most Americans believe in this thinking!

  12. “Social Security has been a very effective program for combating poverty among the elderly.”

    Social Security has been a very effective program for transferring poverty from the elderly to their grandchildren.

  13. My what an interesting read! And such a rush, actually believing that I will see retirement via Social Security along with the others in my generation (the youngest of the Baby Boomers). Will it survive the loss of the dollar’s sovereign status? Well, of course, I’ll get that $900 a month even if that buys a loaf of bread – maybe. Yesterday, I went to the store and the price for a head of lettuce actually doubled overnight to $1.99/head. And I eat a lot of lettuce. But no worries, I can always grow my own if I can meet the mortgage payment on a small acreage with a modest home (say $2200/mo) on a construction worker’s wages which is about $2000/mo now if I can just go back to work sometime soon. Yes, the future looks very bright indeed!

  14. I’ve worked since I was 16 years old…I’m 59 now! Half my life the politicians have robbed the social security account for this or that. My thoughts are keep the crooks out of my funds that I have paid into the account all these years. Make congress part of the same program as the rest of us and you’ll be amazed at how fast any problems are fixed. That goes for health care too! Don’t allow congress pass any law that does not or will not apply to themselves and let’s put term limits on them and end career politicians that see being elected to his or her office as hitting the lottery!!

  15. Sadly we cannot afford SS for everyone. The ‘Greatest Generation’ has elected politicians who have stolen, borrowed and scammed future generations. While I don’t want my grandmother losing sleep about money, I also cannot afford to keep pumping in cash to a system I will never see a dime from

    While I don’t always agree with President Obama this is the first of many stepa

  16. Social Security is NOT an entitlement; it’s NOT something created out of thin air; it is, however, a RETIREMENT SAVINGS ACCOUNT into which seniors CONTRIBUTED for many decades; and, into which current private sector employees now CONTRIBUTE.

    Therefore, any attempts at cutting or eliminating Social Security is a FELONY, with a minimum sentence of five years; since, such action is known as GRAND LARCENY by FRAUD. This program was initiated by the administration of FDR to create a safety net for retired employees, who would’ve either died from starvation or weather-related causes.