The Social Security trust fund

posted by
February 6, 2011
Independent Institute
by Randall Holcombe  
Posted in Commentary

"There is no Social Security trust fund, but it is a useful fiction. For decades taxpayers have paid in more in Social Security payroll taxes than the program has paid out, and the excess payroll tax revenues have gone to pay for other federal expenditures. The Treasury has issued bonds — IOUs — to its Social Security program, but those IOUs are just a claim one office of the federal government has against another. The federal government has no assets to repay those IOUs. You can’t create an asset by saying you owe yourself money. The trust fund is a fiction." (02/01/11)

http://www.independent.org/blog/index.php?p=9259  

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