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SOCIAL SECURITY: That trust fund is gone

Letter by Karl C. Zeiger, Puyallup on April 30, 2012 at 5:03 pm with 10 Comments »
May 1, 2012 9:42 am

The News Tribune has published several articles recently saying that the Social Security and Medicare trust funds will run dry sooner than expected.

It is true that Social Security and Medicare have brought in excess revenue while the massive baby boom generation has been paying for the smaller previous generation. The extra revenue are the so-called trust funds. That money was invested in U.S. Treasury bonds, which means it was loaned to the federal government general fund.

This was a government loan to itself. The federal government then immediately spent it. The money is thus gonen and there are no trust funds.

Yes, the feds owe the money to Social Security and Medicare, but they are deeply in debt and can’t pay unless they collect it from the people a second time. If the surplus had been invested in corporate bonds, for example, or stashed in a vault, the funds would be available to Social Security/Medicare without billing the taxpayers again.

The trust funds are like a person earning an extra $100 and putting it in his right pocket. He then loans it to his left pocket in exchange for an IOU. He calls the IOU a trust fund, then spends the $100. To pay the IOU, he will need to raise $100 again.

We can solve this if we wish.

Leave a comment Comments → 10
  1. FDR was never under the illusion that there was a “Trust Fund.” It was sold that way to the Sheeple so they would think they had a vested interest in Social Security. That lesson was not lost on succeeding generations of Democrats, especially the current lot who sold Obamacare to the gullible. Yes, Virginia, crime does pay.

  2. This is a perfect example of why republicans ruin the economy when ever they have power, they simply do not have what it takes to understand an economy.

  3. philichi says:

    kluwer interesting comment. I cant explain economics to you in 1 paragraph. I will say this. Everything that Europe has done over the last 50 years has been the goal of our democrats. Guaranteed health care, guaranteed retirement, etc. Most of Europe is now bankrupt. Their citizens have lost their drive to succeed.

    Social security is simply another program with good intentions that will be bankrupt. Think about it. It, like Europe, was designed to fail. The US now has $77 trillion in obligations. You can thank your friendly well intioned friends on the left for this, not the guys trying to say no.

  4. BlaineCGarver says:

    Kluwer needs to take his head out of his political behind, and read up a little. Tell us how swell Europe is doing, Bubba….

  5. Pacman33 says:

    Social Security has become a scam that reduces our liberty, reduces the quality of life we can and should be able to afford in retirement. It allows the political class to control the end of our lives despite the principles set forth by our Nation’s Founders and Constitution. It perpetuates the myth of the necessity of a all powerful, nanny state instead of the freedom to take care of ourselves and our families. Decades of deception has embedded the foolish notion in our minds, that elected officials, consisting of sleazebag lawyers, academic introverts and corrupt community activists, are more responsible and qualified than ourselves to deal with our own finances.

  6. A321196 says:

    Why are these letters printed time and again. There is nothing new here! Everyone knows the government put these funds in the general fund via special bonds! So what! Where else? In the stock market run by corporations for their own benefit? If there wasn’t social security and medicare programs, there aren’t enough bridges for the elderly to live under. Of course, I realize those complainers are going to open their doors and let their own flesh and blood come in to their homes and ‘mooch’ off them. Or maybe not! Everybody should have had the foresight to save the dollars needed on their low wages to plan for their retirement.

    There is another model in European history other than the ‘welfare’ state where the workers own the means of production (socialism). It was serfdom where the lord of the manor owned the worker, his domicile and everything else.

  7. kluwer says:

    “I cant explain economics to you”

    Yes I know, you have just proven that by going off on a wild tangent about untrue ‘goals’ and of course Europe.
    That you for making my statement so much more true.

  8. kluwer says:

    “Social Security has become a scam that reduces our liberty, reduces the quality of life we can and should be able to afford in retirement.”

    Wow, that is some wild statement! Is that what you rightists are claiming now?
    Amazing, we are used to this stuff from ailander but are you all infected?

  9. anotherID2remember says:

    The “sheeple” comment wins so far. The elderly and those hoping to cash in on social security benefit from perpetuating the idea that there is a “trust fund”. In truth, a fund was never set up nor was the plan ever designed to be self supporting. It was a tax that few people lived long enough to benefit from. Now the lie the American sheeple were sold has “come home to roost”.

    Too many farmy quotes?

  10. philichi says:

    kluwer sadly, you still think that you know what you know. It is important to understand the European model when explaining our own. It is as the liberals say “progress”. When these silly programs are incepted the left gets excited about giving free health care and retirement to all. They make them better every year. They get elected on this. But in the end we get Europe. Basically people sitting around and collecting checks. It is sort of fun when the check are flowing. They always get ugly in the end. Our checks will stop flowing too.

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