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Social Security Isn’t Just Unaffordable, It’s Ineffective

The national debt is, without a doubt, the most important issue facing the country. And it is only going to grow in importance as it continues to snowball:

Unfortunately, politicians aren’t taking the debt seriously because no politician since the beginning of time has been able to resist the allure of the money printer. Budgets that “stabilize” the debt at 106% of GDP and claim to pay for entitlements through slight tax increases on the wealthy are fundamentally unserious.

Seriously, Biden is trying to make you believe this:

When the reality is this:

Trump isn’t any better when it comes to the budget, but at least some Republicans are trying to reform the biggest contributor to our inevitable debt-fueled demise: social security:

Thank God at least one party is trying to do something, because social security is bankrupting us all:

And is due for bankruptcy itself soon:

Not to mention the fact that it is paid for by taking money from the poorest demographic and giving it to the richest demographic:

These are all common talking points, and I find them compelling, but unfortunately, most other people do not. There’s a reason it’s called the “third rail of American politics”.

It’s easy to see why this is. People care about themselves more than other people. The national debt is an abstract issue that (at least you think) probably won’t affect you, but social security is how you pay your bills. Obviously, you’re going to vote to protect your money. A dog is loyal to the hand that feeds them.

So, if you want to convince people that social security needs changing, you need to appeal to something besides shouting doom about the debt. Luckily for us, this isn’t hard to do because social security is a completely ineffective program compared to the alternatives.

The goal of social security is to provide an income for retirees. You pay into it during your working years so that you can profit in your retirement years. Everyone knows this, but do you know exactly how much you’re spending on it and how much you’re getting out of it? I hate to tell you this, but you’re spending a lot, and you’re not getting much.

The Urban Institute has crunched the numbers for us. I’m going to just summarize some of the findings, but if you want the full results, they are found here. For the purposes of this summary, each of these individuals will be retiring in 2060.

• If you’re a single low earning male ($29,700/yr), you will have paid $257,000 in social security taxes and can expect to receive $388,000 in benefits, for a net gain of $131,000.

• If you’re an average single male making $66,100/yr, you will have paid $572,000 in social security taxes and can expect to receive $640,000 in benefits, for a net gain of $68,000.

• If you’re a single male with high earnings ($105,800/yr), you will have paid $915,000 in social security taxes and can expect to receive $847,000 in benefits, for a net loss of $68,000.

• If you’re a single male with maximum taxable earnings ($160,200), you will have paid $1,403,000 in social security taxes and can expect to receive $1,032,000 in lifetime benefits, for a net loss of $371,000.

The numbers are a little bit better for females because they tend to live longer, but the story is the same. You’re not making much, and at higher incomes, you’re putting in a lot more than you’re getting out.

So now, let’s do the same exercise but with compound interest. Assuming a 10% average annual return (the average return of the stock market), 35 years of investing (the amount of work history social security benefits are based on), and an annual contribution equal to 6.2% of income (the social security tax rate), we’ll see that:

• With an initial investment of $100, the low earning male ($29,700/yr) will have $500,410.98.

• With an initial investment of $1,000, the average earning male ($66,100/yr) will have $1,137,134.15.

• With an initial investment of $10,000, the high earning male ($105,800/yr) will have $2,056,776.03.

• With an initial investment of $15,000, the maximum earning male ($160,200) will have $3,114,434.68.

If you put it all together, the final result looks like this.

It’s pretty clear which one is better for you, and that’s even with me not accounting for any salary increases in the 35 years.

So, you’re being lied to about social security, regardless of how much money you make. It turns out that giving your money to the government is not the best option. Who could’ve guessed?

You’re much better off keeping the money and investing it yourself. That’s the fact we should be shoving down people’s throats if we ever want to free ourselves from this broken monstrosity.

Extras

• Nuclear weapons are back on the radar.

• Keep digital surveillance apps out of the hands of evangelicals 2024.

• People are getting a lot less bag time these days.

• California wants to make it so cars are physically limited from speeding. Weekly reminder that this would be a disaster.

• Oregon’s drug decriminalization experiment failed, but that does not mean that drug reform as a whole is dead.

• India wants to go full China.

• Turns out that banning prostitution increases cases of rape by 44% to 62% and doesn’t even decrease the number of pimps.

• America’s no longer one of the 20 happiest countries, mainly because young people are extremely unhappy. I wonder if stopping the legalized theft that is social security would help boost spirits.

• Surveillance at the border is literally killing people.

• 97% of countries will see their population decrease by 2100.

• The CDC estimates the maternal death rate to be 32.9 deaths per 100,000 live births. It’s actually about 10 deaths per 100,000 live births.

• Is the job market dying?

• China generates almost half of the world’s top AI researchers. The US generates about 18%. And people still want to keep Chinese students out? Ridiculous.

• Trump might get bailed out by Truth Social’s SPAC. Does anyone actually use that thing?

• Kate Middleton has cancer, so now you weirdos can finally leave her alone.

• Congress, please, show us what you know about TikTok’s security risks. All of it.

Until next time, ✌️

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