Over at Forbes,Josh Barro has a response to the recent news about the Social Security trust fund that is both funny and wise:
You may have heard of something called the “Social Security Trust Fund.” Here’s how it works.
There’s a staff of people at the Bureau of the Public Debt whose job is to note down how much was collected in OASDI taxes (the largest chunk of payroll tax) and how much was paid out in Social Security benefits. They take that difference and they write it on a slip of paper. Then, they put it with all the slips from previous years, which are stored in a Very Important File Drawer somewhere in West Virginia.
Lately, the government has been sending out more in benefits than it has collected in OASDI taxes. This means that the Bureau of the Public Debt employees have had to write negative numbers on the slips, which makes them sad. They’re sad because, eventually, the sum total of the figures on all the slips of paper will be negative, which will cause your grandmother to starve to death.
Today, the Social Security Administration announced that they think that will happen in 2033, not 2035, so it is probably time to get granny’s affairs in order.
That’s unless we implement my fix that nobody else has thought of before. We’ll buy a really nice pen (that’s what costs $49.99), have one of those federal workers write “44 quadrillion dollars” on it, and put it in the drawer. By my calculations, this will keep Social Security solvent through 3575, plus granny will get a free lifetime supply of Werther’s Original. Entitlement crisis solved!
If this sounds ridiculous, it is because the accounting gimmicks that make the trust fund sound like it's an actual fund are ridiculous.
There's no reason the government cannot make every single Social Security payment it has promised, just because the trust fund becomes insolvent.
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