No One is Stealing Money from Social Security

by Rod Williams,  Oct. 27, 2025- There are things that people believe that are simply not true. These are not things about which different people can have different points of view; these are things that are simply false. One of these persistently untrue things is that the government stole money from Social Security. First of all, Social Security is the government, but I know what they mean. What they mean is that money that should be in the Social Security Trust Fund was taken and spent elsewhere. That is not true. Yet, this seems to be a common knowledge. I see it on Facebook memes and hear it said on talk radio and have heard it said at political-type luncheon meetings and in personal conversations. There is a Facebook friend, a super Trumpinista, who follows my Facebook post and today he posted his "6-point Save America Plan." Point 4 was, "20-year plan to replace money stolen from Social Security."  

I don't know who started this lie that the government stole money from Social Security, but it is pure fiction. Funds collected by Social Security are invested by law in special U.S. Treasury bonds. If you have a savings account at your local bank, it does not just sit in a vault waiting for you to withdraw it. It is invested. We do not say the bank stole our money. If you, as an individual own a U. S. Treasury bond, you invested your money; the government did not steal your money. It is the same with Social Security; the funds you pay into Social Security are not in a vault waiting to be paid out but are invested and earning interest. 

While the bonds held in the Social Security Trust Fund are a form of debt for the U.S. government, they are considered an asset for Social Security. When Social Security needs to pay benefits, it redeems these bonds for cash from the Treasury. The bonds represent an IOU from the government. The bonds are as about as safe as you can get. 

The real challenge facing Social Security is a long-term funding shortfall, not stolen funds. People are living longer and we have not increased the age of retirement. Also, people are having fewer children, so we have fewer people paying into the system. We have known this was coming for decades and it would have been a painless fix if we had made small incremental changes over time, but we have kicked the can down the road so long that it gets harder and harder to fix and more painful. Still, there are things we can do to fix it. 

Unfortunately, under President Trump, we are enacting policies that are making the problem worse instead of better. The administration's "One Big Beautiful Bill," eliminated income taxes on Social Security benefits for most retirees, which supporters call a tax cut but which would eliminate a revenue stream of about $950 billion and advance the date of insolvency by several years. Also, ending taxes on tips and overtime pay will further decrease tax revenue for the Social Security trust funds. Trump's tariffs and immigration restrictions are projected to reduce overall U.S. economic output and limit the number of workers paying into the system. So, Trump's policies are leading to the depletion of the Social Security Trust Fund at a more rapid pace. 

To bring Social Security outlays more in line with Social Security revenues, we could raise the retirement age, we could cut benefits, we could increase the FICA tax rate, or we could raise the cap on the amount of personal income subject to Social Security taxes. All of these would be met with opposition, but we will probably end up doing a combination of some or all of these. 

Personally, I would like to increase the attractiveness of IRA's and transition away from Social Security. I would like for the rest of the country to have a retirement plan similar to what Federal government employees have.  You don't own your Social Security funds to which you feel entitled. If you die, you can't leave the money you paid into Social Security to your children. With an IRA or a plan like government workers have, you can.

I would also like to make social security means-tested. Warren Buffett does not need to draw Social Security. Social Security is not a retirement plan and you don't own your Social Security. Social Security is a transfer payment. People who are working pay money into Social Security and that money goes to current recipients of Social Security. It is more like welfare than a retirement plan. 

I doubt the reform I want will be considered and we will likely continue with Social Security as we know it, with a combination of the fixes listed above.  While the Social Security Trust fund is projected to be depleted in 2034, this does not mean Social Security will become bankrupt or "insolvent". It means the program will only be able to pay about 81% of scheduled benefits from incoming tax revenue. 

We have a serious problem facing Social Security and the longer we delay fixing it the harder it is to fix. However, this fantasy that all would be okay with Social Security if the government had not stolen money from the trust fund is pure fantasy.

I know that some people are determined to believe untrue things and don't want to be confused with facts. If you are willing to be confused by facts, here is some suggested reading: 

Fact or Fiction: Congress Stole From Social Security and Should Return the Money It's Taken, With Interest | Nasdaq
AMAC: When Will Funds Stolen from Social Security be Replaced?
No, no one is stealing from Social Security (opinion) | CNN
Does the Government Steal from Social Security? – Center for Retirement Research
The Social Security Trust Fund Myth | Cato Institute

There is no shortage of articles from reliable sources debunking the myth of the stolen Social Security Funds. I could supply a hundred more. For some people, like the Facebook friend who posted the "6-point plan to save America," and many more, they delight in their ignorance and somehow take pride in it. They are not to be confused with facts. 

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