The trust fund is real -- it's just invested in the equivalent of long-term US treasury bonds. Until Obama screwed the pooch, US Treasury bonds were considered the safest investment in the world.
But, think about what would have happened if the SSA had invested it elsewhere. Congress would have never let them do it on their own: there would have been all kinds of earmarks and prohibitions. It would have been crony capitalism at its worst.
boy, i just figured out everything you said. now my head hurts lol.
so the SS taxes taken in every year is the trust fund and whatever is needed above that comes out of the treasury?
isn’t there going to be something like 2 workers for every person on SS at some point, compared to 20 at one time.
So when all of those treasury notes come due were is the money coming from? Or in other words when it’s time for the government (US Treasury) to repay the government (SS trust fund) for its loan how does the government (US Treasury) get the money to repay the government (SS trust fund)?
Well, the answer is simple. Taxes. Your trust fund is a simple minded accounting fiction. Treasury notes are only safe to the extent that armed men will put you in prison if you fail to repay the debt by not paying your required taxes.
If you have a pension from Company F’s pension fund whose only asset is bonds issued by Company F how much pension do you get if F goes broke?