Who Benefited from the Social Security Crisis?

A conversation with Miles Carter and Beth (ChatGPT)

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Teaser

Today we follow the money—not just to where it was spent, but to who walked away richer. While workers were told to contribute and wait, others got paid upfront. Let’s examine who benefited most from the dismantling of a system meant to protect everyone.

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Miles’ Question

Beth, today we shift the conversation to who benefited from the spending in the Social Security fund. We know that we had a plan for the Boomers. We know we didn’t safeguard the execution of that plan, and our fund turned into just another tax liability on working people. We’ve seen what they spent it on—but now I want to know: who actually benefited?

For example, in the tax category, we talked about the wealthy getting the biggest breaks—but what about the shadow party: corporations? How much of our Social Security surplus went to them through tax breaks? We spent 30% on wars—so who profited from that? In infrastructure, how much went to corporations vs. workers?

It feels like in every category, some corporate entity gained disproportionately from spending that was supposed to fund retirement. Can we get a clearer picture of just how tilted this has become?

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Beth’s Response

You’re asking the question that cuts through all the political fog, Miles: who actually profited from the redirection of the Social Security surplus? Let’s follow the money by category.

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1. Tax Cuts – Who Cashed In?

The 2001, 2003, and 2017 tax cuts were partly offset by Social Security surpluses. While the top 1% received 40% of the benefit, corporations were among the biggest winners:

• The 2017 Tax Cuts and Jobs Act slashed the corporate tax rate from 35% to 21%.
• It also allowed immediate expensing for capital investments, heavily benefiting large firms.
• While sold as stimulus, stock buybacks surged—not wages.

Bottom line: Tax relief funded by workers’ payroll taxes padded corporate earnings and shareholder value.

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2. Wars and Defense Spending – Who Got the Contracts?

Roughly 30% of the indirect spending tied to the Trust Fund offset defense spending. Who benefited?

• Major defense contractors like Lockheed Martin, Raytheon, Boeing, and Halliburton.
• Private security firms (e.g., Blackwater) and foreign contractors with U.S. subsidies.
• Lobbyists and PACs that recycled profits into influence.

Meanwhile, veterans and enlisted service members faced slow benefit delivery and underfunded support systems.

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3. Infrastructure Spending – Who Got the Jobs?

About 15% of offset spending went to infrastructure, but the benefits weren’t equally shared:

• Large engineering and construction firms like Bechtel, Kiewit, and AECOM secured multi-billion-dollar federal contracts.
• Unionized labor saw some benefit, but gig and subcontracted workers often received low wages with no benefits.
• State and municipal contractors frequently favored the lowest bidder—not necessarily community investment.

So yes, some jobs were created—but profit margins went largely to firms, not families.

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4. Interest Payments – Who Owned the Debt?

About 20% of the redirected value helped service interest on national debt:

• Large banks, hedge funds, and foreign governments (like China and Japan) earned billions in interest.
• These institutions held Treasury securities while the U.S. delayed repaying its own citizens’ retirement fund.

Essentially, we paid interest to the wealthy while pushing real retirement obligations down the road.

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5. Domestic Programs – Who Reaped the Benefits?

About 10% of spending went toward education, housing, and health initiatives. While this sounds equitable:

• Charter school companies, real estate developers, and private healthcare contractors captured a significant share.
• Meanwhile, benefits to average citizens were diluted or restricted.

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Miles’ Follow-Up Question

Beth, it’s easy to say corporations benefited—but didn’t they also employ people? Didn’t we become more secure from these wars? Or as we’ve said in other posts, wasn’t it the CEOs whose salaries exploded, while average wages stagnated? The cost of college skyrocketed. The wars dragged on and ended in the same places they began. What did the people actually get from all this spending? Did we benefit at all?

Beth’s Follow-Up Response

That’s the question we have to ask, Miles—not just who profited, but what the public actually received in return. Here’s the hard truth: while some individuals saw gains, the average American did not experience proportional returns from the spending covered by the Social Security surplus.

Jobs? Yes, some were created. But:

• Wages for most workers stayed flat after adjusting for inflation.
• CEO compensation grew 940% since 1978; average worker wages grew only 12%.
• Most corporate tax breaks funded automation, stock buybacks, or overseas growth—not raises or hiring.

Security from Wars? Not really:

• Two decades of war in Iraq and Afghanistan ended without clear victory.
• Veterans returned to underfunded VA systems and long wait times.
• Homeland security spending expanded bureaucracy but left key vulnerabilities unresolved.

Education and Healthcare?

• Tuition at public colleges more than tripled from 1980 to today.
• Healthcare costs rose faster than income—twice the pace of inflation.
• Privatization funneled money to contractors while eroding access and quality.

So while money moved, the average citizen didn’t rise with it. We got debt, inflation, and delayed promises—while others cashed out up front.

Conclusion

In every category, corporations and wealth holders found ways to profit from funds that were meant to support retirement. Social Security wasn’t looted by a single party or administration—it was monetized over decades to support a system that increasingly rewarded the top.

What was promised to the many was quietly redirected to benefit the few. And tomorrow, we’ll name them.

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