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If an American corporation handled its pension plan like Social Security . . . .
I got my annual "Your Social Security Statement" in the mail today. This is the letter that estimates my benefits if I were to start collecting at age 62, age 67, and age 70. It also comes with a caveat:
Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefits may change because, by 2041, the payroll taxes will be enough to pay only about 78 percent of scheduled benefits.
I always wondered, if an American corporation handled its pension plan the way the federal government handles Social Security, what would the local U.S. Attorney's Office think?
I'm not even sure the quoted statement is 100% accurate. It omits the fact that well before 2041, Social Security is going to need to collect on the IOUs sitting in its coffers. Those IOUs were issued by the federal government, which has been raiding the surplus that Social Security has been generating. However, it's just the federal government borrowing from itself! So, to pay off the IOUs, the government will need to raise taxes, borrow more money elsewhere, or cut benefits. . . .