Franklin D. Roosevelt enacted the Social Security Act in 1935 which established Social Security.
Social Security is funded through payroll taxes called Federal Insurance Contributions Act tax (FICA) or Self-Employed Contributions Act Tax (SECA).
On January 31st, 1940, the first social security check was issued to Ms. Ida May Fuller, a former legal secretary. She had paid into the social security system for just three years, contributing a total of $24.75.
The first check she received was almost the entire amount of her total contribution, and she went on to receive a total of $22,888.92 in social security during her lifetime. She received over 900 times what she had paid into the system.
If you are going to enter into a Ponzi scheme, it’s profitable to get in first and get out first.
Now when Social Security was first introduced, it was assumed that the population would always increase. Benefits increased during the baby boomers productive working years because there were many young workers per retiree.
The baby boom years lasted for almost 18 years.
Today, with over 76 million baby boomers retiring, the ratio of the workforce will decline against those that retire every year for the next 18 years.
Let’s take a closer look at Social Security. Social Security consists of many funds but the two primary trust funds are, Old Age and Survivors Insurance (OASI) and Disability Insurance (DI).
The social security taxes we pay today are allocated to these two funds. These funds are managed by The Board of Trustees in order to generate a rate of return, and then distribute funds to social security recipients.
The Board of Trustees has to file an annual report of the two trust funds and consists of the Secretary of the Treasury, Labor Secretary and Secretary of Health and Human Services of the United States of America.
A recent report from the government (released by the Social Security Administration and signed off by members of the U.S. Department of Treasury) indicated that the number of social security recipients is vastly outpacing the growth in tax revenue generated for the program.
They are running deficits in the tens of billions of dollars and this will not change because elected officials do not have any solutions besides trying to steal it from someone. The governments blanket solution for any shortcoming is to steal from Peter to pay Paul or even better, steal from future generations. People not yet born, don’t vote.
Disability insurance according to the government’s own recent report went bankrupt several months ago and they are currently funding disability insurance by taking money from the OASI trust fund.
The proposed solution to solve this problem should not surprise anyone that see the state and government for what it is.
Democratic Representative Xavier Bacere sponsored a Bill called, “HR 3150 One Social Security Act.”
The bill proposed to merge both social security trust funds into one so that The Board of Trustees doesn’t have to report the insolvent trust fund.
Government accounting 101.
This is fraudulent, and we would be kidnapped and locked in a cage if we tried this ourselves.
It doesn’t matter who gets elected as President or in Congress in the coming years; the game won’t change, and the players will continue to kick the can down the road.
Not a single political candidate wants to have a serious conversation about this on the campaign trail or in debates. Rhetoric, maybe and yes. No one will really explain to the American people what the reality is and what their possible solutions are for this mess because they do not have any.
The outlook is bleak. The Hospital Insurance, HI, one of Medicare’s main trust funds, will be out of money in 2028 and the projection stated in the report is that the entire social security program will be done in 2034.
We are entering the tail end of this Ponzi scheme. Trust the government to plunder whatever they can to keep this going.
They know the 76 million baby boomers are a very large voting demographic. This is the generation that has enjoyed the highest standard living of any generation and still believes in voting. To stay in power, these voters need to be kept happy.
This large demographic group will put severe pressure on these bankrupt programs. The millennials are a bigger demographic group but they are saddled up to their eye balls in student debt, do not have any high paying jobs or even jobs that pay a living wage and not earning the money to fund these programs along with the other younger generations.
The first group of boomers will be fine, however, the baby boomers that will need it at the latter part of their life could be in for a rude awakening.
If it looks like a Ponzi, walks like a Ponzi and talks like a Ponzi, chances are pretty good it’s a Ponzi.
The youngest boomers are around 52 today, by the government’s own numbers, if you’re younger than 47 years old, there will not be enough social security for you and you should plan your affairs and structure your financial life as if there will not be anything.
If you do get social security and you make over a certain amount of income when you are older, they will tax most of the money you receive from social security anyway. The base income that is excluded from taxes currently is $25,000 for a single personal and $32,000 for joint.
State pension systems are bankrupt and corporations are defaulting on debt at record levels.
People that own themselves, are self-reliant, independent and free structure their financial life in a way that they do not depend on the government, states or provinces and corporations to take care of themselves and their family.
If you are economically independent and self-reliant, you need to structure your financial life to limit and reduce the amount that the government will steal from you in the future.
They have already told us that they are coming for the producers.
If we look at the U.S Debt Clock, we can see Social Security as an unfunded liability is $15 trillion and the Medicare unfunded liability is $27.6 trillion. 74 million people are on Medicaid, which is about 23% of the population.
This will keep increasing as the baby boomers start to retire. The United States government is over $19.5 trillion dollars in debt at the time of writing and has a total of $103.4 trillion dollars in unfunded liabilities.
That is about $864,188 per taxpayer.
An interesting figure on the debt clock is the $3.2 trillion dollars of federal tax revenue. The federal tax revenue is projected to rise between $3.8 and $4.1 trillion in just four years, a 30% increase.
There are 42.9 million food stamp recipients, 58 million medicare recipients, and 74.5 Medicaid recipients. These numbers will keep increasing through the baby boomer trend and the Greatest Depression kicks into full gear.
Where will the extra tax revenue come from? People that don’t have any money or people that already pay taxes?
The best predictor of future behavior is past behavior. Leaders around the world, cannot solve the financial problems their countries have. They will have their central banks print and they will plunder their citizens.
Responsible, accountable people need to take action and structure their affairs to ensure that they will be prepared, and limit or eliminate the impact of this massive financial hurricane.
Do it soon because as you can see from the demographic trend and the government’s numbers, we are, as Doug Casey says, “leaving the eye of this hurricane.”
We only have one life and if you educate and apply yourself, you can have the most amazing life; one that exceeds your dreams.This is the most exciting time ever to be alive, and there are opportunities everywhere.
You don’t have to live in a system of chaos, you can create your own system and make the next coming years the most exciting and rewarding years of your life.
Live a life of passion and purpose on YOUR terms,
M.C. Laubscher is the founder and chief wealth strategist of Valhalla Wealth Financial and host of the popular business, investing and financial podcast, the Cashflow Ninja podcast. (http://cashflowninja.com/)