"That's as good as money sir, those are IOUs. Go ahead and add it up every cent's accounted for. Look, see this that's a car, 275 thou might want to hang on to that one."
There is no "trust fund". Social Security is operating at a cash deficit now and will continue to do so from here on out. What is called a trust fund is just a bunch of IOUs the U.S. Treasury has written to itself. Current claims are paid out of current receipts supplemented by other current taxes and new borrowing. Nothing has been set aside. All revenues collected up to this point have already been spent. Period.
"That's as good as money sir, those are IOUs. Go ahead and add it up every cent's accounted for. Look, see this that's a car, 275 thou might want to hang on to that one."
The real issue is the national debt, and whether or not it can be paid. Misstating facts by saying things such as there is no trust fund is not really helpful in solving the problem, though as I admitted, I have actually said this at times, myself in sheer frustration.
It would be better to say that the debt has grown to about 7 times the trust fund, almost 100% of GDP, and endangers the government's ability to continue, since economic collapse ultimately will occur without changes.
On paper, in the government accounting, there is indeed an account that is the social security trust fund. The excesses paid into that fund since 1986 have been
“invested” in non-negotiable government securities. Intra government payments of interest on the securities have been posted to this trust fund account as well.
These securities become part of our national debt, and currently total about $2.5 trillion. The projections were that current receipts would be sufficient until 2017 and then the trust fund securities would begin to be liquidated.
The interest due annually to the trust fund was projected to allow the fund to grow until 2025. Unfortunately, the recession etc. has sent the current receipts into the red about 6 years ahead of time.
Can the government pay this debt? Of course it can. All it has to do is transfer the assets needed to the Federal Reserve Bank, and they print the money to pay the cash. Question is, what will it be worth, if the current spending levels are maintained, debt continues to grow, and money continues to be printed?
I think I read that about half of the current debt is owed to Americans, so the government can simply continue printing money and devaluing the the dollar. Mr. and Mrs. America gets the shaft.
Eventually, other countries will demand higher interest rates to buy our securities, but at the present time, everyone else has so many problems that we are still the safety currency as well as the reserve currency. We need to take steps to make sure we keep this advantageous position by reducing the government spending and outstanding debt.
Focus on the debt, it's something everyone agrees needs to be lowered.