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The trust fund is an accounting fiction that doesn't hold any economically productive assets. Congress spent social security's surplus in the general budget and
by shuckles 8y ago
The trust fund is an accounting fiction that doesn't hold any economically productive assets. Congress spent social security's surplus in the general budget and issued special obligation bonds in return that accumulate "interest" on paper but do not ever collect from the government. They cannot be sold on the market. Taxes or debt needs to be raised or benefits need to be cut effectively now.
This is from a 1999 OMB report:
``These [trust fund] balances are available to finance future benefit payments and other trust fund expenditures–but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.``
- ajross 8y ago> Taxes or debt needs to be raised or benefits need to be cut effectively now. That is emphatically not what your quote says. Stop spinning. Look, the trust fund money flow is going to go negative in a year or three. Is your position genuinely that the whole thing is going to blow up before the end of the Trump administration? Do you care to, heh, put real money down on that assumption? I'll take that bet. Call me.
- shuckles 8y agoWhere did I say that was my position? My comment was purely an accounting claim; there is little opportunity for spin.
- ajross 8y agoSo... you don't think it's insolvent then and agree with the OMB that the bookeeping gets complicated but that money exists to pay the existing claims in full for the next few decades? What is your position if you aren't claiming it's going to go up in a big kaboom?
- Dylan16807 8y ago"If you're <40" "big accounting problem by 2035" Neither of those even resembles a claim that it will "blow up before the end of the Trump administration"
- ajross 8y agoUgh. Why do these threads always turning into such a strawman mess. "Big accounting problem", in fact, were MY words upthread when replying to a claim that SS benefits might not exist by then. And I agree, a ~20% shortfall is a big accounting problem. But it's not a social disaster and doesn't need to be treated like one. Consider: reduce benefits by 7%, increase the FICA payroll tax by 7%, adjust incentives so people reduce their benefit-years by 7%. Seems like our society can survive that without planning on retirement without government assistance.