Money From Social Security Taxes Is Not 'Yours'

The government can't return the SS money it stole in the past. It's impossible. That money's gone. Taxing today's workers to 'pay back' pensioners is just creating a new group of tax victims.

After French protestors took the street to complain about the increase in the retirement age, I read quite a few jokes in social media about how protesting in France is the local pastime.
That may be true, but let it not be said that Americans don't feel very, very strongly about their own national pension program. I say this because in response to my article last week on raising the Social Security age, I received more furious responses than I have for any other article in many years. Here's one example from a man whose initials are MF: 

What are you, just nuts??? Having paid in to SS for over 40 years and experiencing big gov losing my records for some of my most productive years, so my stipend has been reduced; And after my wife and I planned for retirement and saved while contributing to SS, my wife died 2 months after her 65 birthday never having received a single payment from SS after paying in for 42 years. There are no spousal survivor benefits. All the contributions she paid in are gone. Age of qualification isn’t the issue. Corruption, graft and top heavy bureaucracy, while incompetents administer at the front line are the problems. Either wise up, do your research or stay away from topics you seem totally ignorant about.

Here's one from reader RG: 

I didn’t make the promise [to pay a pension at age 65] the guvvmint did. ... You are a useless f**k wasting computer ink. Get your head out of your a** and breath the gathering doom. My father fought in France in WW2 and Korea, didn’t live long enough to collect his benefits nor my mother-in-law. F**k you again.
A reader who was less emotional than I was said that it would be better "to get rid of the Social Security program and give me the money I've paid into it over the past 45 years, with interest, of course."

All of these kinds of answers have something in common. Many people think that the federal government has made them some kind of promise or deal about their pension funds. The supposed agreement is that these former workers will get the money they "put into" the Social Security "trust fund." Some people even seem to think that the money is kept somewhere, earning interest, and can be given back.

Well, I have bad news for anyone who really believes the government's lie and thinks they have some right to today's tax revenues because of a "promise" made by the government decades ago: there was no promise, no agreement, and you have no legal right to money that was "paid in."

2021 Wage Cap Rises for Social Security Payroll Taxes

It's Not Insurance. There Is No Trust Fund. Your Money Is Gone. 

This is because Social Security is not "insurance." It's not a "trust fund." It's just a tax and a welfare program. The money current pensioners paid in was spent on other people years ago. It's gone. 
The legal realities behind Social Security were well summarized by Charles Rounds twenty years ago

Social Security is not an insurance program. A Social Security "account" bears no legal resemblance whatsoever to a bank checking or saving account. Social Security bestows no contractual rights or any other type of property right on workers.
In other words, Social Security as it is currently structured has nothing to do with legally enforceable promises or guarantees. There is no "trust fund" as that term is commonly understood, no funded segregated accounts, no IOUs or bonds stored in some lockbox, or anywhere else for that matter. Social Security is neither solvent nor bankrupt.
In Flemming v. Nestor, 363 U.S. 603 (1960), the U.S. Supreme Court set the record straight. Social Security is actually nothing more than an umbrella term for two schemes that are legally unrelated: a taxation scheme and a welfare scheme.
Workers and their families have no legal claim, grounded in the Fifth Amendment or elsewhere, on the FICA tax payments that they make into the U.S. Treasury, or that are made on their behalf. Those funds are gone, commingled with the general assets of the U.S. government and fully available for purposes unrelated to Social Security. Being mere welfare recipients—not creditors or holders of equitable property rights—workers have hopes or expectations of future benefits, but no enforceable rights to them.
Nestor stood on the shoulders of a previous case, Helvering v. Davis, 301 U.S. 619 (1937). In Davis, the Court had confirmed that Social Security is not an insurance program. During the Helvering oral arguments, the Chief Justice had anticipated Nestor when he speculated from the bench that Congress would have the authority to abolish the welfare component while keeping the taxation component in place.
Thus, it is inappropriate either for the left to call Social Security "solvent" or for the right to call it "bankrupt." A welfare program funded by general tax revenues cannot go bankrupt because its sponsor is a governmental entity with the power to tax and print money, not to mention reduce or eliminate altogether future benefits. The terms "solvency" and "bankruptcy" are appropriately applied to human beings, corporations, trusts, and the like. But not to Social Security. Social Security is not an entity.
So, raising the Social Security retirement age has nothing to do with how much is "paid in." The Social Security tax could still be in place even if the government got rid of Social Security.

People usually get very upset about this because they feel like they "owe" a return on their Social Security taxes. People think of the Social Security tax as different from other taxes, like the income tax, the tax on gasoline, or tariffs. This is shown by the fact that people rarely claim to be owed money from other taxes, like the income tax, the tax on gasoline, or tariffs. In reality, though, these are all just taxes of the same kind that have nothing to do with how the money is spent. How all of it is spent is completely up to Congress and the President. They have always been.

Social Security - Econlib

It's Impossible to "Pay Back" Social Security Revenues to Those Who "Paid In"

Even the most angry readers are right about at least one thing. They understand that if the Social Security retirement age goes up, the benefits will go down. Of course, that's why they're so angry to begin with. They know that if the age is raised, people will spend less and they will probably get less of "their" money.

People who say they want "small government" or lower taxes often insist, though, that they want "their" money. People who paid taxes in the past can't be "paid back," though. "Restitution" would just mean taxing people now to help people who paid taxes in the past. In other words, the government can't give back the money it stole in the past. It can't happen. There's no more money. By taxing workers today to pay off retirees, you're just making a new group of people who have to pay taxes. A plan like this is neither good for money nor moral. It's just more redistribution of wealth by the government.

What should be done with Social Security is the same thing that should be done with all federal programs: cut spending and taxes. Cutting the Social Security tax won't solve anything because it will only lead to bigger deficits, which will cause prices to rise and require more taxes and spending to pay the interest on the growing debt. The only real solution is to cut spending, and one way to do that is to make it harder for people to get benefits when they are younger. Many people who get Social Security don't seem to like hearing that.