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.