# Is there "money" in the Social Security Trust Fund? **URL:** \ **Category:** Great Debates\ **Created:** [August 12, 2014, 7:34pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391 "2014-08-12T19:34:13Z")\ **Posts on this page:** 20\ **Page:** 15
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [August 29, 2014, 4:22pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/281 "2014-08-29T16:22:42Z")
> [@Ravenman](#): > > This is utter nonsense. The literal text of the 14th Amendment is the thing that matters here. > > Are the bonds in the SSTF authorized by law to be issued on the credit of the United States? Yes, Congress directed so. Therefore, that debt cannot be questioned. It’s as simple as that. Again, it’s not being questioned. The debt is being retired since the lender and borrower are one in the same. Buying debt and retiring it is something the treasury does all the time, and you can even donate your t-bill and the treasury will retire it. Your assertion that they can’t do something they do all the time is absurd. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 29, 2014, 4:27pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/282 "2014-08-29T16:27:55Z")
> [@Fuzzy\_Dunlop](#): > > I agree it’s naive to think anything in particular would have resulted in significant genuine savings. I’m not arguing it would have. What I’m saying is it’s possible to look at the effect of the trust funds and analyze whether they resulted in any actual net savings or if they just added to deficit spending. In actuality there was little if any net savings so we can’t say there’s “money” in the trust fund. The money owed outside the government is reduced. Total indebtedness is unchanged. The question is whether total government debt would have been reduced if the trust fund were counted separately or invested in something else. I guess we both agree that it wouldn’t be. Plus, the change in accounting was probably to make deficit spending look better - it didn’t get changed and then all of a sudden they decided to spend more. > [@](#): > > When you’re talking about $3 trillion dollars and a promise to pay benefits to virtually every American, the government has little to do with paying it back. It’s the taxpayers who will be paying for the benefit payments. Just like we would if there were no bonds. Just like it is now. Some benefit payments come from the tax, others comes from the taxpayers as bonds get redeemed. And don’t forget the amount received from rolling over bonds. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 29, 2014, 4:35pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/283 "2014-08-29T16:35:59Z")
> [@Shodan](#): > > Because you are not a branch of government. > > AFAIK. > > Regards, > Shodan Let me try to make this easier for you. In Social Security, I, a tax payer, sends money to SS who uses the money to buy bonds from another part of the government. That part spends the money. While there are no formal bonds issued to me here, my SS statement promising a payment when I choose to retire is close to the same thing. In the example I, a taxpayer, buys bonds, just like the SSTF does. Another part of government takes that money to buy bonds, which yet another part uses. I personally put money in, the government issues bonds to itself, and uses the money to pay the bills. In both cases my money is used to pay the bills, with several level of bonds showing who owes what to whom. Why you can’t seem to get it through your head that my money is initiating the SSTF bond buying action is beyond me. You seem to think that the money SSTF uses to buy the bonds comes out of thin air. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [August 29, 2014, 4:38pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/284 "2014-08-29T16:38:36Z")
> [@treis](#): > > Again, it’s not being questioned. The debt is being retired since the lender and borrower are one in the same. Buying debt and retiring it is something the treasury does all the time, and you can even donate your t-bill and the treasury will retire it. Your assertion that they can’t do something they do all the time is absurd. And so we are back to the tautology: if things were different, they would be different. The trust fund can’t donate bonds. And even if it could, the national debt would be reduced, indicating that the bonds are, in fact, valuable; with the only possible logical conclusion being that the trust fund has valuable things in it. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 29, 2014, 4:41pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/285 "2014-08-29T16:41:44Z")
> [@Ravenman](#): > > In short, I think you go way too far in erasing valid distinctions between parent and subsidiary, simply because you’re excessively focused on the idea of balance sheets being the only factor in your argument. I don’t know how things are done today, but back in Bell System days Western Electric, the operating companies, and Long Lines were all separate companies, owned 100% by AT&T. Western had its own board of directors. Western even had salesmen to sell equipment to the local Bells, and the regulators looked at transfer pricing a lot. Now, they only bought from Western like the SSTF only buys government bonds, but the examples are not that different. ---
**Author:** ![treis](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@treis](https://boards.straightdope.com/u/treis)\ **Post date:** [August 29, 2014, 4:51pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/286 "2014-08-29T16:51:23Z")
> [@Ravenman](#): > > And so we are back to the tautology: if things were different, they would be different. The trust fund can’t donate bonds. > > And even if it could, the national debt would be reduced, indicating that the bonds are, in fact, valuable; with the only possible logical conclusion being that the trust fund has valuable things in it. To be clear, are you now agreeing that the government could pass a law tomorrow eliminating the SSTF and retiring all of the debt it holds? ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [August 29, 2014, 4:54pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/287 "2014-08-29T16:54:03Z")
> [@Voyager](#): > > The money owed outside the government is reduced. Total indebtedness is unchanged. The question is whether total government debt would have been reduced if the trust fund were counted separately or invested in something else. I guess we both agree that it wouldn’t be. Plus, the change in accounting was probably to make deficit spending look better - it didn’t get changed and then all of a sudden they decided to spend more. Unless it was used to reduce total indebtedness, I can’t see how anyone could claim that any “money” was saved. If there were no net savings, how can you say any “money” or wealth was put away in the Trust Fund. > [@Voyager](#): > > Just like it is now. Some benefit payments come from the tax, others comes from the taxpayers as bonds get redeemed. And don’t forget the amount received from rolling over bonds. So future benefits, including those paid for by the trust fund, will be paid for by taxes, taxes or future taxes when those bonds expire. That doesn’t fit any reasonable definition of there being wealth in the trust fund. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [August 29, 2014, 5:17pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/288 "2014-08-29T17:17:10Z")
> [@treis](#): > > To be clear, are you now agreeing that the government could pass a law tomorrow eliminating the SSTF and retiring all of the debt it holds? In the earlier pages of this thread, there were assertions that the debt could simply be voided (my word) by virtue of transferring the bonds to the general fund, and they would simply go “poof” (I think that was one of the words used). I strongly disagree with the constitutionality of any action of cancelling debt, or just making it go away. It’s simply not possible. But the suggestion that the bonds could be donated to deficit reduction is compelling because it recognizes that the bonds do have value, and that value is being redeemed. So yes, I think you (and a couple other posters) have made a pretty good proposal in a technical respect that has much broader implications for constitutionality. However, the idea of “passing a law tomorrow” is just, well, stupid. No. Just, get real. It’s in the same ballpark of reality as Bush/Obama suspending elections, and those kinds of fantastic scenarios don’t deserve to be taken seriously at all. They have no bearing on reality, the law, or even the politics of this issue. It’s silly superstitious, conspiracy-like nonsense. Furthermore, disestablishing the insurance aspect of Social Security is just a plain bad idea, for reasons I’ve described before. (A self-funding system with the goal of solvency, etc.) ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 29, 2014, 6:44pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/289 "2014-08-29T18:44:16Z")
> [@Fuzzy\_Dunlop](#): > > I bolded the part that’s really important. What it all adds up to is a tax liability to us taxpayers. If there were no trust fund, it would still add up to a tax liability for tax payer. That’s what makes them worthless. No, that’s wrong. That has no effect on the value of the bonds. The fact that the government obligation doesn’t change with or without the bonds doesn’t mean the bonds are worthless. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 29, 2014, 6:46pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/290 "2014-08-29T18:46:26Z")
> [@Fuzzy\_Dunlop](#): > > It’s completely on topic. If the excess funds didn’t result in any actual savings then nothing was actually saved. The money was collected and spent and the only option left is for the tax payers to carry all the burden of future benefit payments. > > And it’s fine to speculate what effect the SSTF had on borrowing, but people have actually looked at it analytically. I linked to one research paper that studied the effect of trust funds on deficit spending - they found that every trust fund dollar resulted in nearly a dollar of extra federal deficit spending. That’s not off topic - it’s the key reason the trust fund failed to build any actual wealth to pay for future benefit payments. Its irrelevant to whether those bonds are worth anything. Can you pinpoint cite the part of the paper that says that every dollar borrowed from the trust fund resulted in an extra dollar of government spending that would not have otherwise occurred? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 29, 2014, 6:53pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/291 "2014-08-29T18:53:21Z")
> [@Shodan](#): > > I am explaining to you for the umpteenth time that you are wrong. And I am explinaing to you for the umpteenth+1 time that YOU are wrong. > [@](#): > > If the SSTF isn’t part of the government, then it isn’t covered by the 14th Amendment and therefore has no value according to **Ravenman** ’s definition. If it is covered by the 14th Amendment then it is part of the government because the 14th Amendment applies to debt incurred by the government. > The obligations of the SSTF are carried on the government books as debt. I think I explained that to you before. The SSTF isn’t issuing debt. I don’t see how you are using the 14th amendment logic here. > [@](#): > > So, in your view, Social Security is set up by the government, run by the government, its obligations are part of the government debt, and its obligations are guaranteed by the US Constitution that establishes and controls the government - but it isn’t part of the government. No, I’m saying that the assets in the SSTF is not owned by the government. The SSTF is a custodian and trustee not really an owner. Lets assume that the SSTF were permitted to invest in the obligations of other governments. If the SSTF decided to invest in Canadian bonds, then could the US government reach into the SSTF, pull out the bonds, sell them and use the proceeds to buy more stuff? Does that clarify why I think that the government doesn’t own the assets held in trust? ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [August 29, 2014, 6:58pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/292 "2014-08-29T18:58:23Z")
> [@Damuri\_Ajashi](#): > > Its irrelevant to whether those bonds are worth anything. It certainly is NOT irrelevant if you’re the tax payer being told it’s $3 trillion already paid for and saved up in a trust fund when in reality, you need to pay every penny with interest in non-payroll taxes. > [@Damuri\_Ajashi](#): > > Can you pinpoint cite the part of the paper that says that every dollar borrowed from the trust fund resulted in an extra dollar of government spending that would not have otherwise occurred? [QUOTE=National Bureau of Economic Research] **As can be seen from Tables 2 and 3, the estimate of β over the 1970-2003 period is negative and statistically significant; in this case, it is also significantly greater than 1 in magnitude.** However, in the pre-1970 period, the point estimates of β are not significantly different from zero. This confirms our argument that the adoption of the unified surplus is the factor that hinders the government’s ability to save in the trust funds. Smetters (2003) finds the same qualitative result (no relationship pre-1970 and an inverse relationship post-1970) for the on- and off-budget surpluses. Overall, our results suggest that government saving has not increased despite the almost $3 trillion accumulated in trust funds since 1985. Future generations may have lower payroll taxes than they otherwise would have, but they will not have more resources. They themselves will have to finance their lower payroll taxes with higher income taxes (or lower government spending). The intergenerational burden sharing envisioned by the Greenspan Commission has been thwarted. [/QUOTE] ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 29, 2014, 7:44pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/293 "2014-08-29T19:44:45Z")
> [@Fuzzy\_Dunlop](#): > > Unless it was used to reduce total indebtedness, I can’t see how anyone could claim that any “money” was saved. If there were no net savings, how can you say any “money” or wealth was put away in the Trust Fund. It is used to reduce total indebtedness to those outside the government. That obligation is balanced by obligation to SS participants. SS is, roughly speaking, revenue neutral in the long term - it has to be or the payments are too high. Now if expenditures increased because of the trust fund money being available, then there would be a worse situation for the government as a whole. But that does not change the value of the trust fund. If you gave me $100 to hold for you until next Tuesday, and the hot cash in my hand caused me to run out and buy something, we’d be in a similar situation. If my credit was good enough so that I could get a $100 cash advance to pay you back on Tuesday, I’m worse off having spent more, but you are unaffected by me spending the money. If I gave you a receipt, the value of that receipt is unaffected by me spending or not spending the cash - so long as my credit is good. > [@](#): > > So future benefits, including those paid for by the trust fund, will be paid for by taxes, taxes or future taxes when those bonds expire. That doesn’t fit any reasonable definition of there being wealth in the trust fund. If I buy a corporate bond, or a municipal bond, I will get paid back money from corporate or tax revenues - or from new bond issues. Are these not worth anything either? Is there no wealth in my fund? If there was a high probability of default there would be risk as measured by interest rates. Are you saying that the market is wrong about the risk of these bonds? ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [August 29, 2014, 8:11pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/294 "2014-08-29T20:11:05Z")
> [@Voyager](#): > > It is used to reduce total indebtedness to those outside the government. That obligation is balanced by obligation to SS participants. SS is, roughly speaking, revenue neutral in the long term - it has to be or the payments are too high. Social security is not revenue neutral in the long term. Can you point to any sane projection that shows social security not reaching insolvency without changes being made to benefits or tax rates? Even if you count every penny in the trust fund it still becomes insolvent eventually. > [@Voyager](#): > > Now if expenditures increased because of the trust fund money being available, then there would be a worse situation for the government as a whole. But that does not change the value of the trust fund. > If you gave me $100 to hold for you until next Tuesday, and the hot cash in my hand caused me to run out and buy something, we’d be in a similar situation. If my credit was good enough so that I could get a $100 cash advance to pay you back on Tuesday, I’m worse off having spent more, but you are unaffected by me spending the money. If I gave you a receipt, the value of that receipt is unaffected by me spending or not spending the cash - so long as my credit is good. There’s only one “person” involved - the American people. We all have to pay for this stuff with our tax dollars. We blew the excess dollars on things other than social security benefits, instead of using those excess dollars to decrease our overall indebtedness. Now we have to pay for all of it with future tax dollars. There is no other person to counterbalance any of it. You can’t be worse off while I’m still ok, because we’re all in the same boat. We, through our government, spent all that excess dollars, and now we will have to tax ourselves if we want to keep paying for social security. There’s no savings. > [@Voyager](#): > > If I buy a corporate bond, or a municipal bond, I will get paid back money from corporate or tax revenues - or from new bond issues. Are these not worth anything either? Is there no wealth in my fund? > If there was a high probability of default there would be risk as measured by interest rates. Are you saying that the market is wrong about the risk of these bonds? The market realizes the bonds will have to be paid off by future tax dollars. Their confidence in those dollars doesn’t change the fact that we’ll be paying for them on the spot with our taxes, not with any wealth that was saved in the trust fund. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 29, 2014, 8:21pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/295 "2014-08-29T20:21:12Z")
> [@Fuzzy\_Dunlop](#): > > The question of the thread is “Is there “money” in the Social Security Trust Fund?” That is a question that has a lot to do with balance sheets. So I’m focused on it, but it’s not excessively focused; nor is it the only factor in my argument. It has nothing to do with balance sheets. The question is pretty narrow. The SSTF holds valuable assets. Your point seems to be that those valuable assets do not reduce the overall government obligation. And that is not the question being asked. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [August 29, 2014, 8:27pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/296 "2014-08-29T20:27:45Z")
> [@treis](#): > > To be clear, are you now agreeing that the government could pass a law tomorrow eliminating the SSTF and retiring all of the debt it holds? Just as easily as the government could pass a law tomorrow that eliminates social security entirely. so if your point is that congress could pass a law that makes the SSTF moot so we should act as if they have in fact passed such a law. If thats the case then they could also pass a law that removes the obligation entirely (or move the retirement age to 85) so we should assume they have done THAT as well. In which case, WTF are we even worried about? ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [August 29, 2014, 10:45pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/297 "2014-08-29T22:45:32Z")
> [@Damuri\_Ajashi](#): > > It has nothing to do with balance sheets. > > The question is pretty narrow. The SSTF holds valuable assets. Your point seems to be that those valuable assets do not reduce the overall government obligation. And that is not the question being asked. The question is pretty narrow. The excess trust fund revenue wasn’t saved. All the money was spent. Redeeming the trust fund bonds can only be paid by collecting taxes from current beneficiaries. That is the exact situation we would be in without those trust fund bonds. There’s no “money” in the trust fund. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 29, 2014, 10:55pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/298 "2014-08-29T22:55:30Z")
> [@Fuzzy\_Dunlop](#): > > Social security is not revenue neutral in the long term. Can you point to any sane projection that shows social security not reaching insolvency without changes being made to benefits or tax rates? Even if you count every penny in the trust fund it still becomes insolvent eventually. That’s because of the incompetence of the politicians. I was more thinking of the fact that it should not be making a profit. We need reforms to get it back to revenue neutrality - I think everyone in this thread who doesn’t want to kill SS agrees with that. > [@](#): > > There’s only one “person” involved - the American people. We all have to pay for this stuff with our tax dollars. We blew the excess dollars on things other than social security benefits, instead of using those excess dollars to decrease our overall indebtedness. Now we have to pay for all of it with future tax dollars. There is no other person to counterbalance any of it. You can’t be worse off while I’m still ok, because we’re all in the same boat. We, through our government, spent all that excess dollars, and now we will have to tax ourselves if we want to keep paying for social security. There’s no savings. That’s like saying there can be no wars because there is only one “person” - a human. For the most part people getting SS won’t be paying a lot of tax to pay for the bonds being sold to get them the money. And if they roll over bonds to pay me, I’ll be dead before the rolled over bonds mature. There is savings in the part of the government called the SSTF. That the debt of the rest of the government is bigger than these assets is immaterial. In my example I have to pay back the cash advance. That doesn’t mean the iou is worthless. If we were in the same family. you could do a family balance sheet - but it wouldn’t change anything. > [@](#): > > The market realizes the bonds will have to be paid off by future tax dollars. Their confidence in those dollars doesn’t change the fact that we’ll be paying for them on the spot with our taxes, not with any wealth that was saved in the trust fund. The wealth saved in the trust fund will go to paying social security benefits, as it should. The problem comes when tax dollars go directly to SS recipients. To avoid this, we need to reform it. Why this would be bad has been well covered already. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 29, 2014, 11:03pm UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/299 "2014-08-29T23:03:07Z")
> [@Fuzzy\_Dunlop](#): > > The question is pretty narrow. The excess trust fund revenue wasn’t saved. All the money was spent. Redeeming the trust fund bonds can only be paid by collecting taxes from current beneficiaries. That is the exact situation we would be in without those trust fund bonds. There’s no “money” in the trust fund. All the money I’ve deposited in my savings account has been spent also. if you sum over all bank customers you have a lot less than the deposits sum to. See bank runs. Redeeming trust fund bonds, by the way, will be done by collecting taxes from future beneficiaries, since current ones on the average don’t pay a lot of tax. My mortgage is from the same bank where my savings account it, and is a lot bigger than my savings account. I’ll have to pay the mortgage, and thus my interest, from future earnings. Does this mean I have no savings? Anyhow if we find some suckers ^H^H^H astute foreign investors to buy bonds issues in the future US taxpayers wouldn’t even be paying to redeem the bonds in the SSTF. ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [August 30, 2014, 2:13am UTC](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391/300 "2014-08-30T02:13:15Z")
> [@Voyager](#): > > That’s like saying there can be no wars because there is only one “person” - a human. For the most part people getting SS won’t be paying a lot of tax to pay for the bonds being sold to get them the money. And if they roll over bonds to pay me, I’ll be dead before the rolled over bonds mature. > > There is savings in the part of the government called the SSTF. That the debt of the rest of the government is bigger than these assets is immaterial. In my example I have to pay back the cash advance. That doesn’t mean the iou is worthless. If we were in the same family. you could do a family balance sheet - but it wouldn’t change anything. Let’s say you have two Americans. One turns 18 on Jan 1 2021 when social security stops running an annual surplus, and starts redeeming its trust fund. Person two turns 67 in 2021 and starts collecting social security. It’s his only income and he doesn’t pay any tax on it. The 67 year old says, “Don’t worry, I saved $3 trillion over the past 40 years! We’re all set through 2033! By the way, we do need to raise your taxes by $3 trillion…” That’s not my idea of having saved any money. It’d be one thing if the 67 year old could say he paid $3 trillion in excess tax and used it to decrease our national indebtedness, but he can’t say that. He paid in all that extra money and it just resulted in additional deficit spending. It wasn’t saved. It could’ve been but it wasn’t. [Previous page](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391.md?page=14) [Next page](https://boards.straightdope.com/t/is-there-money-in-the-social-security-trust-fund/695391.md?page=16)