No Fund. No Trust.

Paul Krugman via Market Ticker via Vox Popoli:

Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.

This is spectacularly misleading. The US government hasn't put the social security surpluses into any type of account. They've spent it all. The "trillions" of dollars of assets in the trust fund is simply an accounting gimmick.

As tax revenues crash and the gross social security payments increase, Americans will hear and read more about this multi-generational fraud in the next few years.

Comments

[Classical Liberal]

Note the wording in Krugman's statement "The PROGRAM won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted", which is technically true, but very misleading. The Social Security PROGRAM won't have to "turn to Congress for help or cut benefits" because the special Treasury bonds in the so-called trust fund will be redeemed by the Treasury. It is the U.S. Treasury that will have to raise cash to redeem those bonds, either by issuing more Treasury bonds on the open market, or by collecting more taxes, or by spending less on other things. So while the PROGRAM won't have troubles, the government will have troubles, and they will lay those on the backs of the American people.