asterism
Congress != Progress
No, that is not the compact given by social security law. There is no such compact. You have zero right to future social security payments. None. Zero.
You may or may not gain access to those future revenues, but there is no contract or compact that guarantees it to you. Your access to those funds could be cut off completely and entirely with a single vote in congress tomorrow - and you would have zero legal recourse.
if, on the other hand, the same happened to your 401K or your IRA, you would have legal recourse.
No, you are paying a specific amount into the general fund so that current recipients can receive a benefit that congress grants them. You have no claim on future revenues. None.
So you're saying that structurally Social Security is not an insurance policy nor an investment plan correct?
structurally, it is run a bit like an insurance company. Revenues enter the system and some of those are used to pay current claims. any revenues remaining after paying current claims are invested.
In a traditional insurance company, current payees have a contractual right to those invested funds in future periods. Social Security is a bit different because:
1. By law, it must invest those funds in special treasury obligations. What makes those obligations "special" is that Congress is under no obligation to pay them.
Now isn't that special?
2. By law, no current payee has any contractual right to future revenues.
(as for investment plans, no - it's nothing at all like a personal investment plan)
The problem is that the language we use to talk about SS is quite disassociated from what SS actually is.
Agreed.
In my opinion it should be welfare for seniors funded by current taxes on employees plus any previous surplus. If it were targeted that way, lower incomes could be exempt and higher incomes taxed. However, the needs would be much lower so the tax rates would also drastically go down for nearly everyone. It perhaps could go up slightly for those on the tip top of the income scale.
Now the real question: Why won't that ever happen?