The problem is public perception much of it created by politicians like Rick Perry and perpetuated by Fox News. When Ronald Reagan and Alan Greenspan increased payroll taxes in 1983, it created surplus taxes that went directly to the US Treasury
and were immediately spent, as they always had been since the program's inception in 1935. There was no provision for investment of those surplus funds in equities or precious metals or any kind of promises of higher payouts in the future. The Social Security Administration keeps track of those surplus funds by issuing special interest bearing bonds that are not redeemable on the market place. The so called Social Security Trust Fund is nothing more than an accounting of these bonds. The bonds will be "redeemed" as necessary from the US Treasury as future payroll tax revenues do not keep pace with benefit payout. According to the Social Security Trustees
, the special interest bonds "will be redeemed until trust fund reserves are exhausted in 2036
...thereafter the payroll tax income will continue to pay three-quarters of scheduled benefits
There have never been any promises of higher payouts. The Social Security Trustees have issued their public reports annually since the inception of the program. The only thing that differs each year is the dates that the Trust Funds run out. In the last 10 years the dates have varied from the low 2040s to the high 2030s. The CBO
also estimates those dates using a different set of assumptions. Their latest report shows 2049 as the magic date and not 2036. This reflects the uncertainty in the assumptions going into the long term estimates.
Also it should be noted that the program never goes bankrupt
. If Congress does nothing, the program will still payout 3/4 of the benefits after 2036 (or 2049 as the case may be).
All of this information has been public knowledge every year since 1935, and especially regarding the surplus since 1983. Any candidate for the Presidency that suggests this is an investment scheme or Ponzi scheme is either totally ignorant or a liar. In either case it should disqualify him/her as a candidate for President.