Janet Novak, of Forbes, tells us today that Social Security is not only failing but is also probably a fraud. Her ire and anxiety is fueled by Congress cutting off a rather bizarre loophole which she says, "could cost some baby boomer couples tens of thousands of dollars."
The headline: "After Budget Deal's Surprise Cuts, Can Boomers Really Count On Social Security?" Please.
At issue is a loophole whereby one spouse can file for retirement benefits, immediately suspend those benefits and allow them grow until they maximize while they draw spousal benefits instead. It is a rather bizarre loophole and, notwithstanding that my wife is making use of it, I have always regarded it as absurd and have never figured out why it was there in the first place. Ms. Novak says that it will "cost tens of thousands of dollare," but I would say that it prevents people from committing a form of legalized fraud.
Ms. Novak also thoroughly discredits herself by saying that the Social Trust Fund is "arguably an accounting fiction." Where do supposedly intelligent people keep coming up with the idiotic notion that, since the Social Security Administration has invested trust fund money government bonds that the "government has spent the money and it no longer exists?" She also says that the trust fund, "will give the Social Security Administration legal authority to pay full benefits until then, even if they’re not covered by current taxes." Well, yes, that is precisely what a trust fund is designed to do; it is the entire purpose of a trust fund.
The purpose of the article, clearly, is not to inform; it is to sow fear, uncertainty and doubt.