The Ultimate Scarcity, Sense on the Social Security Trust Fund

In a recent Tech Central Station article, David R. Henderson and Charles L. Hooper have accomplished what empirical evidence seems to indicate has been incredibly difficult, i.e. making sense of the reality of the Social Security Trust Fund.

"...And that's why the Trust Fund is irrelevant. To buy the bonds in the Trust Fund from itself, the government must get the money from somewhere. It has four options. It can reduce other government spending. It can sell assets. It can increase taxes. Or, it can sell bonds. In other words, the Trust Fund has no effect­ -- zero­ -- on the government's financial situation...."

To nitpick, the government has a fifth option, that of simply printing new dollars, but the existence of the Trust Fund is irrelevant to that option as well.

Read the whole article.

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Couldn't the government just

Couldn't the government just sell the bonds on the open market?

nmg said: "The result of the

nmg said:
"The result of the Trust Fund (namely that the general fund will have to increase revenues to pay it back)"
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Just a small detail. That result is actually due to "loans" from the trust fund. As was mentioned on the house floor when it became standard practice to use the fund to cover the deficit, this would probably be considered illegal in a private firm.

This is also true for all deficit borrowing.

nmg goes on:
"It is a horrible, insidious scheme to tax citizens twice for the same level of so-called service."

Taxed once for the fund, taxed a second time because the government took the funds to cover other debts. Hmmmm.....nmg has some unusual ideas for how to handle ones finances. I hope no one tries his ideas at home, with the new bankruptcy bill and all they might run into a bit of a disagreement about how this works when they try to claim the CC co.'s can't collect because that would be charging them twice. Amusing. Thank you for the laugh.

Fight Social Security, Love SS, Change SS…all fine positions that I've heard arguments for, but don't just sweep government dishonesty under the carpet because it fits with ones over all view.

However nmg is right about the scam, he, and I know I'm a lone wolf crazy here, just won't pin this particular bit of chicanery on the embezzlers, and neither will any one else. Misappropriation of government funds is a different issue. But no one seems to mind that...I wonder why?

But the particular accounting fraud that has been done with the fund is separate from the fund itself. There is a huge body of law, both traditional common law dating back centuries and oodles of it from the past 100 years...and all of it shows that those who handled these funds were criminals. Wait...oh that's everyone in the House and Senate for the last 3o years...ah well...more the fool me.

Anyone got a sex scandal?

There's an even more

There's an even more insidious reality of the Trust Fund non-event. It never should have been "formed" in the first place, it was never necessary!

The result of the Trust Fund (namely that the general fund will have to increase revenues to pay it back) is that same as if we had never formed the Trust Fund at all and merely committed to making up the future payroll tax shortfall when the time comes!

It is a horrible, insidious scheme to tax citizens *twice* for the same level of so-called service.

It's not going too far to say that the SS Trust Fund is perhaps the biggest financial scam ever perpetrated by any entity at any time.

nmg

To nitpick, printing new

To nitpick, printing new dollars is essentially the same as increasing taxes. The difference is simply that the effects of inflation are not very clearly visible to the citizens. Inflation is one of the most deceptive ways of taxing people.