Specifically, when illegal aliens acquire fake SS cards and gain employment - what happens to the money that gets paid in to the SSA, assuming that said illegal will never draw from that money?
The same thing that heppens to the money when someone dies before retirement. The money is transferred to social security recipients.
But when someone dies, wouldn’t the SSA get some sort of notification of the passing? How are they to know that money taken in is for/from a fake #? Or if it’s a duplicate #, does the money find it’s way to the person who has the same #?
Social Security isn’t run like a bunch of savings accounts. People do not receive back the specific money they put in. All the money that’s collected is put into a single fund. Social Security payouts are all then drawn from that fund. Any excess money is used to buy treasury bonds.
Ok, but what happens with these bonds?
Right, Social Security isn’t an annuity, it’s transfer payments. Current receipts are used to pay today’s recipients. Future payments will be made from future receipts. There’s a trust fund which has invested the surplus in government securities, but if you go to the Social Security office they don’t have your money sitting in a drawer somewhere.
They help fund the government just like every other treasury bond.
It’s all one big pot. Money is dumped in at one side and ladled out at the other. How it gets there and where it goes is just a set of figures for accountants to work out.
Yes, there are a very few specialized systems where the payments are linked to the providers but Social Security isn’t one of them. It’s part of the general tax flow.
They get held until they mature, and then the general fund transfers the money plus interest back to the SS fund, where it either goes to making payments to SS recipients or is used to buy more bonds.
A famous politician once suggested that there is or would be a “lock box” under his administration.
I’m not sure if he actually proposed changing things but it didn’t happen.
The only thing I can add is that when my father died, Social Security knew about it before his death notice even appeared in the newspaper.
This is the interesting question. Your eventual payment depends in part on the money you put in. If you are not paying the maximum, and get credited for payments from someone fraudulently using your number, you should wind up with more money.
One of my uncle’s had an illegal alien use his SS number a few years back, which really screwed him over because he had just put in for Social Security Disability benefits after being hospitalized, with this blood clot related disorder whose name I don’t remember. Caused a big mess, it delayed his benefits by months while he proved that he wasn’t working in Texas, but was in a hospital in Minnesota.
back when congress was running a surplus in the late 90s they did put SS in a lockbox. That lasted until they needed the money a year or two later, then they quietly unlocked the box.
Must have been an awful big box… who had the key?
How exactly did that work? I thought the Social Security trust fund was invested in government bonds, which means the money becomes available for the government to use. Where else can they keep the money, so it won’t be spent by the government?
I’d be interested in some more “lock box” info.
Did Gore actually propose anything with teeth that would have kept social security funds safe?
… and even if he did, wouldn’t it have still allowed the overall deficit to get bigger anyway?
Probably. But it’s worth noting we ran a surplus, not a deficit, during the Gore years.
All the more reason that he should have had a “lock box” all set up and ready to go …right?
We have a shortage of bibbed denim garments? Because that’s the only meaning of “overall deficit” that I can see applying. The Social Security Trust Fund is a distinct entity from the Federal government’s operating budget (“General Fund”). This is like claiming that a bankrupt estates lawyer is not really broke, because there are tens of thousands left in the Orphaned Children’s Trust Fund he was administering (which he borrowed from with personal notes but did not embezzle from).