The Social Security 'Theft' Myth That Refuses to Die

Spread across Reddit and Twitter: Congress is stealing from Social Security. The theory goes—if lawmakers returned the “borrowed” funds plus interest, the program would be fine.

Here’s the reality check:

The $2.678 trillion in Social Security reserves (as of March 2024) isn’t sitting in a vault. By law, these funds are invested in special-issue government bonds earning ~2.5% interest. This is functionally identical to you buying a CD at your bank—the bank uses your cash, pays interest when it matures.

Every single payment has been made. No default. Ever.

So what’s actually breaking Social Security?

1. Demographics are brutal: Worker-to-beneficiary ratio is cratering. Baby boomers retired, Gen X is smaller, and Americans live 85+ years—far longer than when the program launched in 1940.

2. Fertility collapsed: 2023 fertility rate hit 1.62 (need 2.1 for population stability). Fewer kids = fewer future taxpayers.

3. Immigration slowed 50%: Net legal migration dropped sharply since 1997. Immigrants typically work decades, paying payroll taxes.

4. The wage cap is broken: Only 83% of earned income now gets taxed (down from 90% in 1983). High earners’ wages grew faster than the cap increased.

The real villain? Congress delayed fixing the math. Trustees forecast OASI reserves depleted by 2033—potentially triggering 21% benefit cuts for 52M+ retirees currently averaging $1,980/month.

Blaming theft is easier than acknowledging demographic collapse. The truth is messier.