[ancient_geezer]

If I write a $1,000,000 IOU to myself and put it into the Toddsterpatriot lockbox, what do I have?

You aren't writing an IOU to yourself in the particular case, you have sold a non-negotiable certificate of credit to a trust fund promising to use future tax revenues to pay the trust back and have used the proceeds to buy that which is outside the trust fund.

You have a debt against future general tax revenues to replace funds back into the trust out of general revenues.

I guess I'll have to go to work after all.

More likely your children and grandchildren paying both SS taxes they are liable for plus additional taxes to pay off the non-negotialbe certificate of credit used for consumption today.

So I'm economically illiterate?

If you stick by your lack of logic, the case could be made.

What if we took Al Gore's idea, $1,000,000 in the lockbox is an asset

Obviously Al Gore is economically illiterate. You want to use him as your economic guide, all I can say is "Garbage in Garbage out."

 

http://www.heritage.org/Research/SocialSecurity/em940.cfm

Misleading the Public: How the Social Security Trust Fund Really Works
by David C. John
Heritage Foundation Executive Memorandum #940
September 2, 2004

In short, the Social Security trust fund is really only an accounting mechanism. The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits. The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs. For that reason, the most important date for Social Security is 2018, when taxpayers must begin to repay the IOUs, not 2042, when the trust fund is exhausted.

 

http://www.heritage.org/Research/SocialSecurity/BG1176.cfm

Social Security Trust Fund Report Shows Need for Reform
by Daniel J. Mitchell, Ph.D. and Gareth G. Davis
Heritage Foundation Backgrounder #1176
May 04, 1998

The 1998 Social Security Trustees Report, released April 28, 1998, reveals that the retirement program is actuarially bankrupt. The retirement program's real unfunded liability has expanded to $17.9 trillion, more than 6 percent higher than reported last year. Moreover, because the Social Security Administration's long-term life expectancy figures are flawed (the Bureau of the Census calculates that Americans will live nearly two years longer than under the figures used by Social Security), the actual long-term deficit is significantly higher.

Opponents of Social Security reform say the report is good news because the bankruptcy date for the Trust Fund is 2032, three years later than predicted last year. But even if the figures in the Trust Fund Report are accepted as accurate, the prognosis for the program is grim. According to the six members of the Board of Trustees of the Social Security Trust Fund (which includes three members of President Bill Clinton's Cabinet):

• Social Security benefits will exceed projected payroll tax collections in 2013. This annual deficit will explode quickly thereafter, climbing from $49 billion in 2015 to $684 billion in 2030.

• The total unfunded liability of Social Security, adjusted for inflation, is now $17.9 trillion --four times greater than the national debt.

• Because surplus payroll taxes have been spent on other government
  programs, the Trust Fund contains nothing but IOUs. To make good on those IOUs, politicians in the future will have to raise taxes or issue debt.

• Even if these IOUs are redeemed, the Trust Fund will go bankrupt in 2032. This is 4 years earlier than projected only five years ago and 16 years earlier than projected ten years ago.

• In order to keep the system solvent when the Trust Fund runs dry in 2032, payroll tax rates would need to increase by one-third or benefits would have to be cut by 25 percent.

• Social Security's crisis is driven by demographics. Today, there are 3.4 workers for every beneficiary. The Trust Fund report predicts that, because of longer life spans and lower birth rates, there will be only 2 workers for every beneficiary by 2030. As recently as 1960, there were more than 5 workers per beneficiary.

The Trust Fund Report confirms that Social Security is in crisis and cannot be sustained in its present form. The trustees now indicate that the program's finances are in even worse shape than previously thought. Any efforts to close this funding gap, however, simply will drive Social Security's poor rate of return even lower.

*** SNIP ***

[Toddsterpatriot]

You aren't writing an IOU to yourself in the particular case, you have sold a non-negotiable certificate of credit to a trust fund promising to use future tax revenues to pay the trust back and have used the proceeds to buy that which is outside the trust fund.

So the taxpayers have written the taxpayers an IOU.

If you stick by your lack of logic, the case could be made.

Be more specific, where was my lack of logic?

Obviously Al Gore is economically illiterate. You want to use him as your economic guide, all I can say is "Garbage in Garbage out."

Al Gore is in no way my economic guide. I just wanted to show that his error and american spirits error would cancel each other out.

I know that Social Security is a terrible investment, as currently structured. But thanks for the links and graph. Maybe american spirit will follow your links and figure out the truth.