[kabar]

This is true, but the fund is not holding a pile of cash, or stocks, or real estate investments. It's holding a pile of Treasury Bonds. The income was used to lend to the government and once expenses exceed income can only be paid out by the government buying back the bonds out of general funds. So it's really an artificial distinction.

It is more than an artificial distinction. The full faith and credit of the USG is behind the T-bills just like it is with the debt held by the Chinese or Japanese or any other holder of T-bills. The USG would have to default so as not to redeem them. If that were the case, it wouldn't really matter any more because the country would be so far gone, the economy would be in a state of collapse.

[cuban leaf]

If that were the case, it wouldn’t really matter any more because the country would be so far gone, the economy would be in a state of collapse.

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This is my take as well. If SS collapses, we are ALL in for tough times. All of us. And that speaks to my tag line and why I moved to where I now live.

[mlo]

"It is more than an artificial distinction. The full faith and credit of the USG is behind the T-bills..."

I wasn't implying a default. The point was that the money is being held in a trust fund, not paid to general revenue. But that is an artificial distinction because the money has just been loaned out and the loan must be paid back with general revenue. Yes there's a fund, but it's a bookkeeping entry. Excess SS collections have all been used to fund the government, and future draws on those funds have to be paid out of general revenue, fund or no fund.