The Social Security system is a deceptive pay as you go system. No money is saved and the beneficiaries are paid off with money from new recruits (ugh new workers). The returns for the first SSI recipients were astronomical. Those fortunate to be at the top of the pyramid received Thousands of percent returns on their investment. Around the 1930s, the first recipients worked a few weeks, retired, and received a lifetime income stream. This seemed great, because there were more workers paying into the social security than those receiving benefits. Those who paid into the fund were drawn to the promise that they'll get their turn.
This fraud has been perpetuated for the past 80 years.
All pyramids come to an end sooner or later, because high exponential growth in wealth is impossible. When the Social Security funds start running out, major changes will be required. For those under 30, it's very unlikely that they'll receive full payments. Payments will be either reduced or completely eliminated by the time they reach golden age. For the United States government, it will be forced into a difficult situation where it has to stop entitlement or raise taxes to a crippling amount.
Contrary to US perceptions of itself, it does not have an infinite amount of wealth. Around 20% of the current budget already goes to Social Security. If it tries to keep the Social Security system, the United States will one day be forced into bankruptcy, much like the way GM's pension is forcing GM to go under. It will be another 50 years or so before that happens, but the burnout will be spectacular.
