Let’s see if I’ve got it right.
There is no money in the trust fund, only a bunch of IOUs from the U.S. Gov’t, which has been borrowing from the trust fund for decades. Now, the Gov’t is running a deficit, so it’s selling Treasury bonds to make up for the money it’s spending that it doesn’t have. In order to keep interest rates low on the Treasury bonds, the Federal Reserve has been buying the T-Bonds. The Fed Reserve is actually broke itself, and has gotten huge infusions of cash from the Fed Gov’t, which means the Fed Gov’t is actually financing the deficit by buying the T-bonds with it’s own money which it doesn’t have.
Well, I feel better. I’m sure the trust fund will be perfectly safe.
Think of this way: You fill a bucket at the deep end of the pool, then go to the shallow end and pour in the water to make the shallow end deeper.....or
You’re drunk, and you drink more to get sober....or
You’re drilling holes in the bottom of the boat to let the water out quicker.
The Obama White House must adore these ideas.
Actually, it is worse than that - the SS Trust fund actually consists of paper bonds stored in a file cabinet in WV.
Reichstag fire, here we come...