Social Security's State Today
Today experts of different opinion will tell you that Social Security is the greatest program in the history of the United States government, and others will tell you that it is a fraud built on accounting slight of hand. We believe that the truth is somewhere in between where government has over-promised what Social Security can deliver, and has over time failed to make the hard choices which were necessary to make the system viable.
How Big Is The Hole
The Social Security Administration says that there is a short-fall of 17.1 trillion dollars (page 14 of the Social Security Trustees Report). More widely you will hear 6.1 trillion, but what they don't tell you is : that figure assumes that some people are paying fully knowing that they will not get back a penny.
How Does Social Security Work
The Department Of The Treasury collects payroll taxes for Social Security. The Treasury Department uses the proceeds to pay benefits. If there is excess cash - where the Treasury collects more than it spends - the Treasury Department holds the funds in Trust, and invests the money in securities issued by the US Government. If the proceeds fail to cover the cost of benefits, the Treasury Department uses funds held by the Trust Fund to cover the payments.