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Tue Apr 24, 2012, 01:51 PM

Once again: The Social Security Trust Fund is neither a fiction nor bankrupt. That is a myth. [View all]

Since this has been going around, the myth that wouldn't die, I suppose I need to take a few minutes to correct the facts.

There is a widespread belief and claim, pushed by various people for various reasons, that Social Security has had money "borrowed" or "taken" from it by the government to be spent on whatever, and that therefore it's really secretly empty, been stolen, filled with IOUs, or whatever other story you want to spin. Usually this is pushed in the same breath as implying (or outright stating) that both parties are conspiring to kill seniors and that Social Security is a fraud. Despite that, this storyline has found a substantial home on the left, particularly among the "attack the Democrats" faction.

Here's the thing though: This claim is false. It's not "sort of" or "controversial," it's just outright false. Anyone who pushes this claim is either misinformed or outright lying.

This money has not been "stolen" or "spent" simply because it's not all sitting in one giant vault somewhere gathering dust. It has been invested, in the same way that putting your money into a certificate of deposit isn't the bank stealing from you just because that money is no longer sitting in your pocket. Frankly, I expect to hear that kind of ignorant pseudo-sophistry from the Ron Paul types who live off paranoia and a failure to understand monetary policy, but it always annoys me to hear some on the left claiming something not just wrong but blatantly intended to deceive and undermine confidence.

The Social Security Trust Fund currently contains about $2.6 trillion dollars in assets, mostly in the form of US treasury bonds. These investments are there for the same reason that any money is invested anywhere: to produce returns, in this case increasing Social Security revenue through interest. An interest rate of 2.4%, which is the average that the SSTF collected last year, doesn't sound like much... but on $2.6 trillion dollars, that's $63 billion a year extra that's being collected by the Social Security system. Not to mention that if you simply piled cash in a vault, not only would it not grow in value, the SSTF would actually shrink due to inflation. Because of its investments, Social Security is MORE financially sound, not less, and with no substantive risk since it's based on legally binding US treasury bonds. US bonds are, in fact, legally enshrined in the constitution, with the 14th Amendment establishing that their validity "shall not be questioned."

In summary, the claim that the trust fund has been "stolen" or replaced by "IOUs" is patently wrong, akin to saying that if you can't physically see your money sitting in a bank vault it's not there. It's an absurd claim, and one we should put to rest for good.

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Reply Once again: The Social Security Trust Fund is neither a fiction nor bankrupt. That is a myth. [View all]
TheWraith Apr 2012 OP
joeglow3 Apr 2012 #1
TheWraith Apr 2012 #3
joeglow3 Apr 2012 #46
Scuba Apr 2012 #79
joeglow3 Apr 2012 #82
TheWraith Apr 2012 #152
Yo_Mama Apr 2012 #128
ronnie624 Apr 2012 #132
lacrew Apr 2012 #37
HiPointDem Apr 2012 #39
joeglow3 Apr 2012 #47
HiPointDem Apr 2012 #50
liberalmike27 Apr 2012 #64
liberalmike27 Apr 2012 #52
PoliticAverse Apr 2012 #2
closeupready Apr 2012 #4
TheWraith Apr 2012 #5
PoliticAverse Apr 2012 #10
TheWraith Apr 2012 #11
PoliticAverse Apr 2012 #13
TheWraith Apr 2012 #19
bemildred Apr 2012 #6
Fumesucker Apr 2012 #7
TheWraith Apr 2012 #15
Snake Alchemist Apr 2012 #26
sendero Apr 2012 #72
Fumesucker Apr 2012 #51
hughee99 Apr 2012 #8
Cleita Apr 2012 #9
TheWraith Apr 2012 #12
Cleita Apr 2012 #14
TheWraith Apr 2012 #17
Romulox Apr 2012 #89
TheWraith Apr 2012 #156
eridani Apr 2012 #65
The Wielding Truth Apr 2012 #16
Romulox Apr 2012 #18
TheWraith Apr 2012 #20
joeglow3 Apr 2012 #48
HiPointDem Apr 2012 #69
joeglow3 Apr 2012 #70
HiPointDem Apr 2012 #71
joeglow3 Apr 2012 #84
Recursion Apr 2012 #111
Cleita Apr 2012 #21
Romulox Apr 2012 #41
Cleita Apr 2012 #45
Romulox Apr 2012 #49
Kaleva Apr 2012 #22
Romulox Apr 2012 #42
Kaleva Apr 2012 #53
HiPointDem Apr 2012 #68
Romulox Apr 2012 #87
Recursion Apr 2012 #107
Romulox Apr 2012 #129
Recursion Apr 2012 #133
Romulox Apr 2012 #161
MannyGoldstein Apr 2012 #28
Romulox Apr 2012 #40
girl gone mad Apr 2012 #55
Romulox Apr 2012 #88
Recursion Apr 2012 #94
Romulox Apr 2012 #95
Recursion Apr 2012 #98
Romulox Apr 2012 #102
girl gone mad Apr 2012 #56
Romulox Apr 2012 #85
girl gone mad Apr 2012 #159
Recursion Apr 2012 #76
Romulox Apr 2012 #86
Recursion Apr 2012 #92
Romulox Apr 2012 #97
Recursion Apr 2012 #99
Romulox Apr 2012 #100
Recursion Apr 2012 #101
Romulox Apr 2012 #103
Recursion Apr 2012 #104
Romulox Apr 2012 #105
Recursion Apr 2012 #108
Romulox Apr 2012 #110
Recursion Apr 2012 #113
Romulox Apr 2012 #120
ronnie624 Apr 2012 #124
lumberjack_jeff Apr 2012 #109
Romulox Apr 2012 #112
lumberjack_jeff Apr 2012 #116
Romulox Apr 2012 #131
Recursion Apr 2012 #134
Romulox Apr 2012 #135
HiPointDem Apr 2012 #136
lumberjack_jeff Apr 2012 #145
Recursion Apr 2012 #146
Dragonfli Apr 2012 #23
bvar22 Apr 2012 #24
pa28 Apr 2012 #25
Cleita Apr 2012 #31
Snake Alchemist Apr 2012 #27
Kingofalldems Apr 2012 #32
Snake Alchemist Apr 2012 #33
Uncle Joe Apr 2012 #35
Snake Alchemist Apr 2012 #36
LanternWaste Apr 2012 #91
Snake Alchemist Apr 2012 #93
Nye Bevan Apr 2012 #60
Uncle Joe Apr 2012 #29
MannyGoldstein Apr 2012 #30
alc Apr 2012 #34
PoliticAverse Apr 2012 #38
EdinGA Apr 2012 #43
Romulox Apr 2012 #44
eridani Apr 2012 #67
Romulox Apr 2012 #90
eridani Apr 2012 #153
lumberjack_jeff Apr 2012 #118
Romulox Apr 2012 #130
lumberjack_jeff Apr 2012 #144
eridani Apr 2012 #154
Romulox Apr 2012 #158
allenwsmithphd Apr 2012 #54
girl gone mad Apr 2012 #57
liberalmike27 Apr 2012 #66
Recursion Apr 2012 #106
Nye Bevan Apr 2012 #58
girl gone mad Apr 2012 #62
Nye Bevan Apr 2012 #63
girl gone mad Apr 2012 #73
The2ndWheel Apr 2012 #81
girl gone mad Apr 2012 #160
lumberjack_jeff Apr 2012 #121
Nye Bevan Apr 2012 #123
lumberjack_jeff Apr 2012 #143
ronnie624 Apr 2012 #127
lumberjack_jeff Apr 2012 #142
Nye Bevan Apr 2012 #150
lumberjack_jeff Apr 2012 #155
ronnie624 Apr 2012 #163
Egalitarian Thug Apr 2012 #147
Nye Bevan Apr 2012 #149
spanone Apr 2012 #59
coalition_unwilling Apr 2012 #61
allenwsmithphd Apr 2012 #74
ronnie624 Apr 2012 #77
Recursion Apr 2012 #75
lumberjack_jeff Apr 2012 #122
ronnie624 Apr 2012 #78
Yo_Mama Apr 2012 #80
bemildred Apr 2012 #83
lumberjack_jeff Apr 2012 #114
Recursion Apr 2012 #115
lumberjack_jeff Apr 2012 #119
Romulox Apr 2012 #96
ronnie624 Apr 2012 #117
allenwsmithphd Apr 2012 #125
HiPointDem Apr 2012 #137
Throd Apr 2012 #126
allenwsmithphd Apr 2012 #138
Recursion Apr 2012 #139
HiPointDem Apr 2012 #140
Recursion Apr 2012 #148
Recursion Apr 2012 #141
allenwsmithphd Apr 2012 #151
lumberjack_jeff Apr 2012 #157
allenwsmithphd Apr 2012 #162
Nye Bevan Sep 2013 #164