Part 2:  More History and the Problems with Social Security

I left off part one stating this:

“Why doesn’t my money in my Social Security account draw any interest?”  The answer is really quite simple. I will go into the answer to this and more in Part 2 which I will post in two days after you’ve had a chance to really understand Part 1.  Stay tuned for more outrageous information that will make you sick!  Check back on Sunday, 01/12/2025 for part 2. 

Well this is that Part 2.

A side Note:

Before getting into this I wanted to let you know that my first part of the article did get a comment from an old friend and associate of mine.  His name is Nick, and he used to be in charge of technology with the company I used to use for my Financial Planner Practice.  When I first met Nick he was a guitar player in a pretty good ROCK band (when he was not working).  He had long hair – the ponytail – and would refuse to try to impress anyone in the Financial Services Company by wearing a suit (he was more the Blue Jeans and T-shirt kind of guy).  But he was one of the nicest guys in the entire corporate office and since he was the Leader in technology he had a lot of the Senior Execs ears to listen to him – if they wanted their computers fixed anyhow!

While he was working, Nick was going to Law School in the evening.  He eventually did retire and completed school, took his Minnesota Bar Exam and is not know as “Nick (last name left off), Esquire.”  Nick, like me, also rides motorcycles – or did – so he and I became very good friends.  I could always count on his support … and still do.

Nick will try to leave a comment or word of encouragement on every article I write – and this is no exception.  I normally look forward to his critique (that’s what I call it … not criticism … because I’m always looking to learn).  Now that you know all of this … I’d like to share Nick’s comments on Part 1 of this article.  I’m sure you could read these for yourself if you go to my blog site and pull up the article.  This is what Nick had to say, and of course, I may have a few words to add to this at the end of his comments or throughout the rest of this article (and I am sure Nick is interested in those as well).

Nick’s Comments:

“Hi Jerry, hope you’ve been well my friend!

Interesting article, but respectfully a bit oversimplified in that the math doesn’t account for massive inflation [70s and 80s] negative returns (during the recessions, especially 2006-9) and market volatility during the last 50 years that would change decisions made then rather than speculation now made in hindsight.

While I agree that SS is a legal Ponzi scheme, the fact still remains that most people are not savvy (nor responsible enough) to save for their own future (just look at the lack of 401k maximum contributions that most people overlook or fail to participate in) and without any SS would create the environment for an even larger drain on their families and the overall economy.

Additionally, while SS doesn’t pay interest while you contribute, it does pay 8% annually after age 62 until the person collecting it starts taking their distribution. While 8% is peanuts for us more savvy investors, Joe Lunchbox would only get <1% because they would most likely put their savings into a basic bank account. Now there’s a future article idea for you, the “futility” of saving money at a bank. Savings accounts and CDs are a complete waste of investment opportunities and only the banks win out on those types of account. Especially CDs and Annuities, the sucker’s bet 😎

Hope your doing well my friend, take care and Godspeed to you and the family!

Your “now finally licensed Councilor friend,”

Nick, Esq.”

Some of My Comments on Nicks Comment:

He is correct “a bit oversimplified in that the math doesn’t account for massive inflation and recessions and volatile markets of the past.”  I could have been more technical – and would have been had I been writing this article for a bunch of people who have worked a lifetime in Financial Services (or if I were trying to publish a book on the subject or even represent a clients family in the case of an unjustified death and we were calculating the remaining financial worth of the person who died for lawsuit purposes).  But I am writing the article for those that Nick may consider “Joe Lunchbox” and want to keep it as simple as possible for the majority of the people who may read it to understand the basics of what is going on with Social Security and why I feel it’s a lost cause. 

“I agree that SS is a legal Ponzi scheme.”  This is something that Nick and I do agree on.  It is a Ponzi scheme.  But just what is a Ponzi Scheme in case some of you don’t know or have never heard of it.  Here’s the clearest most simple answer I can provide to you:

A Ponzi scheme is a fraudulent investment scam that promises high returns with little or no risk to investors. It operates on the following principles:

1. Attracting Investors: The scheme initially attracts investors by offering unusually high returns or dividends that are supposedly generated from legitimate business operations.

• Paying Early Investors: The organizer pays returns to early investors using the capital from new investors, rather than from profit earned by the operation.

• Recruiting More Investors: The scheme relies on a continuous influx of new investors to pay off earlier investors. As long as the organizer can recruit new investors, they can continue to pay returns to earlier investors, creating the illusion of a profitable business.

• Collapse: Eventually, the scheme collapses when the pool of new investors dries up, and the organizer can no longer pay returns to existing investors. This typically leads to the scheme being exposed, resulting in substantial financial losses for most participants.

The name “Ponzi scheme” comes from Charles Ponzi, who orchestrated such a scheme in the 1920s. His operation promised high returns from arbitrage of international postal reply coupons but ultimately paid earlier investors with the money taken from later investors.

These schemes can be devastating for those involved, so it’s important to be cautious and skeptical of any investment that seems too good to be true.

Bernie Madoff orchestrated the largest Ponzi scheme in history, defrauding thousands of investors out of an estimated $65 billion. His scheme ran for decades, and he used his wealth management business to create the illusion of high returns by paying earlier investors with the money from new investors.

In 2009, Madoff was sentenced to 150 years in prison and ordered to forfeit $170 billion. He died in prison in 2021. The fallout from his scheme was devastating, affecting thousands of individuals, charities, and institutions.  He actually, from what I understand, offered his investment to citizen Donald J. Trump at one time … but Trump stuck to what he understood, Real Estate Development projects.  Smart Man!

It was once said that Bernie told the courts he learned his Ponzi Scheme from Social Security and how it works.  There’s no evidence to suggest that Bernie Madoff explicitly stated he learned Ponzi schemes from the Social Security Administration. However, some critics have drawn comparisons between Social Security and Ponzi schemes, arguing that both rely on new contributions to pay existing beneficiaries.  I’ve got news for you … so does every “Defined Benefit Pension Plan” that’s ever been in existence.  That’s why most that you find today are for groups like Federal Employees, Teachers Retirement and other Municipal and City and State employees.

After Nick said the part about people not being savvy or responsible enough to create their own retirement as evidenced by the number of people who cannot or will not contribute the maximum allowed to their 401k plans, he goes on to say, “and without any SS would create the environment for an even larger drain on their families and the overall economy.”

I tend to agree somewhat with this statement … but let’s look at the real reason Social Security Laws and the Act were even created.  When Social Security was first established in 1935, it was intended to provide a supplement to other retirement plans in existence at the time. The idea was to create a safety net for elderly Americans who might not have sufficient income from other sources, such as private pensions or savings.  It was never intended to be the only retirement plan a person was to depend on during their lifetimes.

Then something strange happened … The Social Security Administration has expanded its benefits over the years to provide more comprehensive support. Here’s a brief overview of when some of these benefits were added, and in some cases repealed:

• Widows (Survivor) Benefits: Added in 1939, these benefits were designed to provide financial support to the spouses and children of deceased workers.
• Minor Child’s Benefits: Also introduced in 1939, these benefits were intended to support the children of deceased workers.
• Educational Benefits: The Social Security Act Amendments of 1965 included provisions for student benefits, which were later repealed in 1982.
• Disability Benefits: Added in 1956, these benefits were created to provide support to individuals who were unable to work due to a disability before reaching retirement age.

These expansions reflect the evolving nature of the Social Security program as it aimed to address various social and economic needs over time.  However, it also added greatly to the expense of providing benefits. Taxes charged on maximum income levels, in my opinion, were never able to keep up with all these benefits that our “law makers” voted on without fully understanding the ramifications of such additions. But, then again, lawmakers always vote without understanding the ramifications and unintended consequences of such votes.

So, Nick is correct when he says, “and without any SS would create the environment for an even larger drain on their families and the overall economy.”  But I have to add to that … because social security went above and beyond what it was supposed to be for and because the government tends to “Borrow from Paul to pay Peter,” not only has the Social Security Administration become a Legal Ponzi Scheme it is also fast becoming a PAUL BEARER at its future FUNERAL.

To not have Social Security “would create the environment for an even larger drain on their families and the overall economy,” but to have it is causing an environment of larger drains on the Federal Government resources and the overall economy and Federal Deficit.  Social Security does contribute to the federal deficit. Since 2010, Social Security has been running an annual deficit, meaning it collects less in revenue than it pays out in benefits. To cover this shortfall, Social Security redeems special-issue Treasury bonds held in its trust funds, which the federal government must repay by borrowing from the public.

While it’s challenging to provide an exact percentage, it’s estimated that Social Security’s annual deficits contribute significantly to the overall federal deficit. The cumulative deficit over the next 10 years is projected to be around $4.1 trillion.  Only God (and the Federal Government) may know how much of the current deficit Is attributable to Social Security and Borrowing from Social Security.

Nick also says (and I partially agree), “Additionally, while SS doesn’t pay interest while you contribute, it does pay 8% annually after age 62 until the person collecting it starts taking their distribution. While 8% is peanuts for us more savvy investors, Joe Lunchbox would only get <1% because they would most likely put their savings into a basic bank account.”

Actually, Social Security Does not pay interest on the money they have already collected, so I agree with him on this part.  What they do is decide to discount your retirement that you should get at normal retirement age. This is actually how it would work if you took benefits at age 62 or delayed retirement to age 70 assuming “normal retirement age” (currently 67 if born after 1960). 

If you retire at 62 instead of waiting until your full retirement age (which is 67 for those born in 1960 or later), your Social Security benefits will be reduced by about 30%.  This means that you actually lose 6% simple interest per year (30% ÷ 5 years)

For example, if your full retirement benefit would be $1,000 per month, retiring at 62 would reduce your benefit to around $700 per month.  On a compounded interest basis to grow $700 to $1000 in 5 years a person would have to earn 7.39% per year.  This may be where Nick is getting his 8% per year figure.

However, if you delay taking Social Security benefits until age 70, your monthly benefit would increase by 32% compared to if you had started at your full retirement age of 67. This is because you earn delayed retirement credits of about 8% per year for each year you wait beyond your full retirement age.  Again this 8% is simple interest over four years 67, 68, 69 and 70.  The actual Compounded rate would have to be 7.10% compounded annually.

For example, if your full retirement benefit at age 67 would be $1,000 per month, waiting until age 70 would increase your benefit to about $1,320 per month.

The main point is the government STILL does not pay you interest on the contributions you’ve already made.

Now don’t get me wrong.  I do respect Nick and if I ever needed an attorney I’d most likely rely on his expertise in legal matters (as long as his expertise is what I need at the time).  After all, how many people in their mid 30s or potentially early 40s decide to become a lawyer and work full time, play in a band and go to school part time to make that dream come true.  Nick had the tenacity and gumption to set a goal and achieve it though I know it took him many, many years.  That being said understand this.  As a financial advisor I’ve faced off with many attorneys on Financial Plans I’ve written for hundreds of clients and the one thing I learned for sure is that if it is not their idea – most attorneys will look for holes in my plan.  I think they learn to do this in law school to protect their client, and I have nothing against it.  They should protect their client.

However, I am not writing this article for a group of Financial Advisors or Lawyers, nor would I attempt to present this as fact in a court of law – so I’m sure both groups could find all kinds of holes in it.  While I have researched reliable sources for much of this article, the biggest portion of it is still personal opinion (and you may or may not agree with it), but I am trying to make it so the average person can understand some of the problems we are facing with Social Security, as it stands today, and why many say the system is going to fail in the next few years.

Now back to: More History and the Problems with Social Security

“Why doesn’t my money in my Social Security account draw any interest?” 

The government does not “classify” it as your money even though it came from you.  Here’s how the system works – and has always worked – and will likely always work (until we the people demand something better).

Social Security operates as a pay-as-you-go system, meaning that the taxes collected from current workers are used to pay benefits to current retirees. (Yep, very much like an Investment Ponzi Scheme that would be illegal if you and I did it).  The money collected from taxpayers isn’t held in individual accounts that earn interest for each person. Instead, it’s pooled together and invested in special Treasury bonds that earn interest collectively (for the government to use to fund unfunded benefits).

In other words, the interest income is then used to help fund Social Security benefits of those retired. So, while the system does earn interest on the money it collects, it’s not passed back to individual taxpayers as interest on their contributions.

Basically, the money you paid in funded someone else’s retirement and the money you are receiving as a Social Security benefit is actually being paid by your children, grandchildren, or some other poor taxpayer.  Just like a PONZI SCHEME, isn’t it?

The first Social Security taxes were collected in January 1937. The Social Security Act was signed into law by President Franklin D. Roosevelt on August 14, 1935, but it took a couple of years to set up the system and begin collecting taxes.  The first Social Security benefits were received by Ida May Fuller on January 31, 1940. She was a 65-year-old retiree from Ludlow, Vermont, and her first check was for $22.54. Interestingly, she had paid a total of $24.75 in Social Security taxes during her working years.  Ida May Fuller received a total of $22,888.92 in Social Security benefits over her lifetime. This amount was collected from January 1940, when she first received her first benefit check, until her death in January 1975.  As you can see Social Security was “Dead on Arrival” (DOA) based on the fact that many people drew out much more than they paid in (and it looks like it is going to continue that was as long as workers are forced to continue to pay into the system and as life expectancy continues to increase over time).

Remember I told you in Part 1 that I, with my employer, paid $256,525 into social security over my 52 working years?  Well, I’ve been retired for 6 years and personally have taken out $187,200.  This does not include my wife’s portion which is about half what I get.  By the end of this year, I will have taken out $224,400 and my wife would have gotten $112,200 for a grand total of $336,600.  I gotta tell you … that’s not really a bad return on an investment account that should have been valued at just $256,525 6 years ago – though there never was an investment account in my name at the Social Security Offices in Washington D. C.  The Administration can only do this because we still have more paying into the system than is taking out of it, but …

HERE’S AN INTERESTING FACT TO STICK AWAY AND REMEMBER:

When Social Security began in 1935, the ratio of workers to retirees was 159.4 to 1. This means there were about 159 workers for every one Social Security beneficiary.

By 2023, that ratio had dropped significantly to 2.7 workers per beneficiary. This decline is due to factors like increased life expectancy, lower birth rates, and changes in immigration patterns.  This is one reason that taxes must either increase as well as income that Social Security is taxed on – Or – benefits must be decreased  – Or – retirement ages (including early retirement at 62) must be increased.

It’s projected that the ratio of workers to Social Security beneficiaries could drop to 1 worker for every beneficiary by around 2080 (just 55 years from now if Social Security can last that long). This projection is based on current demographic trends, including declining birth rates, increasing life expectancy, and changes in immigration patterns.

Now you will hear some say that Social Security started as a voluntary program, but I assure you Social Security did not begin as a voluntary program. From the outset, participation in Social Security was mandatory for employees working in jobs covered by the program. Employers and employees were required to pay payroll taxes, which funded the Social Security system. While some jobs were initially not covered by Social Security, over time, more jobs became subject to the payroll tax.  This is what happens when we send someone to congress thinking they are looking out for our best interest and trusting that they are when, in fact, they rarely ever do.

We’ve already seen the Social Security retirement tax rate increase from 2% on the first $3,000 of annual income in 1937 to 12.4% on the first $176,100 of annual income in in 2025 (and again this is just the rate for Old Age, Survivor and Disability Income – OASIDI – and has nothing to do with Medicare). 

So, the tax rate has gone up by 620% while the amount of income taxed has gone up by 5,870%.   By now you have to be scratching your head wondering when is the madness gonna stop?  On average tax rates have increased by 7.05% simple interest per year in the past 88 years while the maximum taxable income has gone up by 66.70% per year average over the same period. 

If this trend were to continue just on the tax rate, we could see taxes at 100% by 12 to 13 years from now.  This is why you have some people forecasting the demise of Social Security before those currently paying into the system draw the first dollar of benefits. In reality the tax rate has not increased an average of 7.05% every year over 88 years … that’s just an average.  But any increase from this point forward could be devastating.

Do you really know what is in the Social Security trust fund?  Do you care?  If not, you should! 

As of the latest report in May 2024, the Social Security Trust Fund has $2,788,463 trillion in asset reserves. This includes both the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds.  This is the fund that your retirement income comes out of.  It has nothing to do with Medicare (at this point in time).

Your next question may be, “How much flows into the social security trust fund each year?” 

The Social Security Trust Fund receives income from payroll taxes, interest on its investments, and taxes on Social Security benefits. In recent years, the annual inflow has been around $1 trillion.  Yes, even though you paid Federal Income Tax on all monies sent into the Social Security Administration while you were working, you’re still being taxed on a portion of the income that you take out.  Tell me that is not “Double Taxation.” 

Now check this out … In 2024, the Social Security Trust Fund paid out approximately $1.392 trillion in benefits. This includes payments to retirees, disabled individuals, and survivors of deceased workers. This means that they paid out $392 billion more than they took in.   So, if there is $2,788,463,000,000, in reserves, the administration takes in $1 trillion and pays out $1.392 trillion … how long do you think the reserves of $2.788 trillion will last.  Seems like we are beginning 2025 with only $2.396 trillion left in reserves.  If the deficit were to continue, and never increase at, at the current rate of $392,000,000,000 per year Social Security would be broke in about 7.11 years – or by sometime in 2032.

(Simply $2,788,463,000,000 ÷ 392,000,000,000 = 7.113426

Now this is the question that many have asked me over the years:  Has the government ever used money in the social security trust fund for any purpose other than the benefit payments to recipients?

The answer:  Yes, the government has used money from the Social Security Trust Fund for purposes other than benefit payments. When Social Security collects more in payroll taxes than it needs to pay out in benefits, the surplus is used to purchase special-issue government bonds. These bonds are part of the national debt, and the government can use the funds for other budgetary needs as well. 

However, this creates an obligation for the government to repay the Social Security Trust Fund with interest. So, while the money is technically borrowed, it is legally required to be repaid and used for Social Security benefits in the future. Or, so “they” say!

What has the government used social security funds for other than to pay social security benefits?

The government has used Social Security funds for various purposes other than paying Social Security benefits. When the Social Security trust funds collect more in payroll taxes than they need to pay out in benefits, the surplus is invested in special-issue Treasury bonds. The federal government then uses these funds to cover other budgetary needs, such as:

• Defense spending
• Education
• Healthcare
• Infrastructure projects
• Other government programs and services

Does that mean that if the government takes in less than it pays out … it will not borrow any money from Socials Security for other needs?

When I researched this question, this is the answer I got:

Yes, that’s correct. When the government is running a deficit—meaning it takes in less money than it spends—it cannot borrow from the Social Security Trust Fund for other needs. The money in the Social Security Trust Fund is dedicated solely to paying Social Security benefits. If the government needs to borrow money to cover other expenses, it must do so through other means, such as issuing Treasury bonds to the public or other government borrowing mechanisms.

The last time the government borrowed from the Social Security trust fund was in 2020. Since then, the trust fund has continued to redeem its special-issue Treasury bonds to cover the shortfall between incoming revenue and outgoing benefits

So, I dove a little deeper by researching this question, “Did the government take in more into social security than what it paid in benefits in 2020?”

The answer I got was this:  No, in 2020, the Social Security program did not take in more than it paid out in benefits. The program ran a deficit, meaning it paid out more in benefits than it collected in taxes and other income. This deficit contributed to the depletion of the Social Security trust fund reserves.

This is the next question I researched:  I thought it was stated earlier that the government could not borrow money from social security unless it had a surplus in revenue?

The answer I got was, “I apologize if there was any confusion. To clarify:

The Social Security trust funds are financed through payroll taxes collected from workers and employers. When the trust funds run a surplus (i.e., collect more in taxes than they pay out in benefits), the excess funds are invested in special-issue Treasury bonds, which the federal government can use to fund other budgetary needs. However, when the trust funds run a deficit (i.e., pay out more in benefits than they collect in taxes), they need to redeem these Treasury bonds to cover the shortfall.

The government is obliged to repay these bonds with interest. This means that regardless of whether there is a surplus or deficit, the funds held in the form of Treasury bonds are still an asset to the Social Security trust funds and must be repaid when needed.

So, while the government can use surplus Social Security funds for other purposes, it must repay those funds with interest when Social Security needs to redeem its bonds to pay benefits.

Isn’t that just like the government.  They love to talk in circles to keep the citizens confused.  They think if we are confused, we will have no choice but to follow them like lost lambs and sheep follow the Sheppard.  I don’t think of you as Lambs or Sheep.  I think of you as people who want to know and understand.  This is why I am trying to make it clear to you.

So how does the government actually make up the difference if they pay out more than they take in and the interest on the reserves is not enough to fund the difference?  The interest they would have to earn on a reserve fund made up primarily of Treasury Bonds would have to be ($392,000,000,000 ÷ $2,788,463,000,000 = 14.06% per year).  What do treasury bonds currently pay in interest rates? 

As of the latest data, the interest rates for U.S. Treasury Bonds are as follows:

• 20-Year Treasury Bond: Approximately 5.03%
• 30-Year Treasury Bond: Approximately 4.95%

This is far less than the 14% needed to cover a one-year deficit in Social Security Spending.

When the Social Security Trust Fund doesn’t have enough reserves to cover the difference between what it takes in and what it pays out, the government has a few options:

1. Borrowing: The government can borrow money by issuing Treasury bonds to the public or other entities. This is similar to how it borrows for other budgetary needs.
2. Increasing Revenue: The government can increase Social Security taxes or find other sources of revenue to fund the shortfall.
3. Reducing Benefits: If necessary, the government can reduce Social Security benefits to ensure the program remains solvent.

Currently, the Social Security Trust Fund is projected to be able to pay full benefits until around 2034. After that, if no changes are made, the program will only be able to pay about 78% of scheduled benefits from ongoing tax revenues.  That means in 9 years there could be a drastic change – but the Trump Administration and the Biden Administration will be long gone from Washington D.C. when this happens.  This has been stated my economists and analysts that are far smarter on the subject than I am.  Earlier my prediction was as early as 2032.  At some point there will no longer be “a can that can be kicked down the road!”

Now if the Trump Administration has said it will not increase taxes on Social Security and it will not reduce benefits on Social Security (I assume that is what they meant when they said they would not “touch” Social Security Benefits) – then the only option they have as it exists now (without some sort of magic wand) is to BORROW by issuing Treasury Bonds or by printing up more worthless paper money.  So, what happens to our National Deficit when the government has to issue bonds or print money to cover needed expenses?

When the government issues Treasury bonds or prints money to cover its expenses, it can have several effects on the national deficit:

1. Increasing the Deficit: Issuing Treasury bonds increases the national debt because the government is borrowing money that it will need to repay with interest. This adds to the deficit in the short term and long term.
2. Inflation: Printing money increases the money supply, which can lead to inflation if the increase in money supply outpaces economic growth. Inflation reduces the purchasing power of money, which can have various economic consequences.
3. Interest Rates: Increased borrowing can lead to higher interest rates as the government competes with the private sector for available funds. Higher interest rates can make borrowing more expensive for businesses and consumers, potentially slowing economic growth.  Also, as borrowing makes it more expensive to profitably run a business … the business will pass that cost on to the consumer by increasing their prices to the consume, hence more inflationary pressures than should be needed in our fragile economy.
4. Investor Confidence: Excessive borrowing and printing money can undermine investor confidence in the government’s ability to manage its finances. This can lead to higher borrowing costs and reduced willingness of investors to buy government bonds.

Overall, while these measures can provide short-term relief, they can also lead to long-term economic challenges if not managed carefully.

As of now, the U.S. national debt is approximately $36.15 trillion. The national deficit, which is the annual difference between government spending and revenue, contributes to this growing debt.  Are you aware that if interest cost on debt is as little as 5% per year the interest cost of $31.4 trillion could amount to $1.808 trillion per year? 

Link to national debt clock … https://www.usdebtclock.org/

In fiscal year 2024, the total government revenue, excluding FICA (Federal Insurance Contributions Act) and Medicare taxes, was approximately $2.6 trillion from individual income taxes and $2.2 trillion from other sources such as corporate income taxes, excise taxes, estate taxes, and other fees.  So, of $4.8 trillion the Federal Government is going to potentially use 32.71% of that just to pay interest on the Deficit.  Yeah Right!

What effects our national debt the greatest?

Here’s a breakdown of how different government programs contribute to the national debt:

1. Social Security and Medicare: These programs are significant contributors to the national debt due to the aging population and rising healthcare costs. As more people retire and live longer, the cost of providing benefits increases.
2. Defense Spending: The U.S. spends a substantial amount on defense and military operations, which adds to the national debt.
3. Interest on Debt: The interest payments on the national debt itself are a major expense. As the debt grows, so do the interest payments, creating a cycle that can be difficult to break.
4. Discretionary Spending: This includes funding for various government agencies and programs, such as education, transportation, and housing. While not as large as entitlement programs, it still contributes to the overall debt.
5. Tax Cuts and Stimulus Programs: Reductions in tax rates and stimulus spending, especially during economic downturns, can increase the deficit and add to the national debt.  Knowing this … how many believe it’s realistic to cut the national deficit by cutting taxes?  It may be possible if everything else falls into place, but not highly probable.  However, people have said they were going to reduce taxes for years just to get elected for some position in government. Remember George H W Bush who said, “Read my lips, No new taxes?”

These factors combined create a complex fiscal challenge for the government. Balancing spending and revenue is crucial to managing the national debt effectively.  Remember, dear reader, the Federal Government does not create any revenue.  All they get they get from “We the People.”

Now with all of this going on in the background is it any wonder that Social Security Benefits for retired people, widows and widowers and disabled people cannot keep pace with the cost of living?  Let me explain what I mean in Part 3 of this article that is due out in two days (01/14/2025).  Until then, stay tuned!