The Truth About the Trust Fund  | Wed May 12, 2010 6:44 PM EDT
Veronique de Rugy hauls out a familiar argument today: we can't
rely on Social Security's trust fund to keep it healthy for the
next few decades.  In practice, [] the trust fund and interest
payments it receives are simply accounting fiction. For years,
the federal government has been borrowing the Social Security
Trust Fund assets for its daily spending. The fund has nothing
left in it except IOUs from the federal government. In fact,
even the interest is paid in IOUs.  Hence, the only way Social
Security will not go into the red this year and in future years
is if the federal government pays back Social Security. But
since the money has long ago been consumed, it must borrow money
from the public or raise taxes to pay its Social Security debts.
It's true: from a purely fiscal point of view, the Social
Security trust fund is a fiction. But while this is true as a
bare fact, the implications of this argument are pernicious and
need to be vigorou