Thats only because you are conflating the SSTF with the general treasury. The general treasury owes that money to the SSTF. So the SSTF has an asset and the general treasury has a liability. You are trying to say that the assets in the SSTF doesn’t represent a reduced obligation on the treasury to come up with funds to pay its SS obligations. But that’s not the same thing as saying that the SSTF does not hold valuable assets.
First of all you’re confused about the surplus. Last year, I believe, the net flow of money into the trust fund turned negative, in part due to baby boomers retiring and in part due to unemployment reducing income from the tax. It might have turned positive with improved employment - if so I haven’t seen anything about it. The flow of money will turn negative as it should.
Second, you seem to be saying that every penny into the trust fund resulted in an additional penny of deficit. Got a cite for that? The cite above didn’t say that in the summary, and I suspect it should.
BTW I’m not at all convinced by the article. It certainly comes from a reputable source, but reputable economists are political animals also. The date is suspicious - just when Bush started talking about privatizing Social Security. And even if there is a correlation, we don’t know whether the change led to increased spending or increased spending led to the change.
If you are implying 3 trillion in SS taxes was in any way meant to decrease our indebtedness you seriously don’t have a clue about what Social Security is. That money represents an obligation to future beneficiaries. Buying bonds is a way of storing the money, and the government selling bonds to the Chinese or to me or to the SSTF makes no difference to the non SSTF debt.
Yes, there is a legal distinction between the SSTF and the government and the taxpayers. Just the same as there is a legal distinction between John Smith and John Smith, Inc. (an S corp wholly owned and operated by John Smith).
But functionally they are the same. These trusts and corporations are set up as a legal fiction to say that they are distinct from their human owners and operators for limited liability and other purposes, but they remain functionally the same.
If John Smith used his money to buy bonds from John Smith, Inc. that then pissed all of the money away on booze, nobody would say that John Smith has valuable assets. Can we at least agree on that?
Now, the differences I’ve seen argued between John Smith and the SS Trust Fund are as follows:
- The government must repay these bonds under the 14th amendment.
Yes, that is true but absolutely meaningless. Repayment of these bonds will come from future revenues (either taxes or more borrowing). If these bonds didn’t exist, then payment of social security benefits would come from future revenues. There is no functional difference in having the bonds. Same with John Smith. His bonds will only be repaid through future earnings of John Smith, Inc. which would go into his pocket anyways.
- But John Smith, Inc. cannot print money like the U.S. Government!
Very true, but meaningless. Whether the government prints money to honor the bonds or to pay for social security benefits leaves the retirees in the same position with or without the bonds.
- T-bonds are the safest investment in the world. What else should the fund invest in?
Again this seems to imply that the disagreement is that the bonds won’t be repaid or that future beneficiaries will be stiffed. They will the paid, but they will be repaid from future revenues. That is no different that paying beneficiaries from future revenues. Borrowing money from yourself is pure accounting fiction no matter how good your credit is.
Of course you don’t use the surplus in the fund to buy gold or hold cash or heads of cattle. Those all have their own shortcomings. What you do is use the money to retire other outstanding obligations so that those don’t accrue interest.
So there isn’t enough money in the trust fund to retire all of the outstanding obligations? Then at least admit that the money was all spent on retiring debt instead of saying it is an asset.
- The law says that the SSTF is distinct from the treasury, therefore it is and saying anything different is imagining a future hypo that may not happen.
See above. Corporations and trusts are fictions. Juggling money between pockets is the same thing whether you incorporate your pockets, declare that pocket 1 holds funds in trust for pocket 2, or that your hip pocket is a holding corporation for pockets 1 and 2. Doesn’t matter. It’s legal semantics that obfuscate the true financial position of all of your pockets.
- But social security has a dedicated funding source!
See above. When the government takes $10 from you does it matter how it is styled? If $9 of that is the National Defense Tax would anyone suggest that we can’t cut defense spending at all since it has such a bountiful revenue source?
*I guess the objection lies with the word “fiction.” It’s not meant as a pejorative. Corporations are legal fictions and these fictions serve valuable purposes. But when evaluating the overall system, one must look behind these fictions and see that John Smith doesn’t own anything by owning his John Smith, Inc. bonds.
If you don’t wish to use a prejorative term, why not use “construct” instead of “fiction?”
Is there “money” in the Social Security Trust Fund?
Depends what you mean by “money.”
Now, I’m just taking a shot in the dark here, but if the Internet Fairy came along and magically deleted every post between the OP and this one, would any progress have actually been lost?
If I used the word “construct” would you come across the aisle and join my side? 
here you seem to be saying that this is a distinction without a difference. I would suggest that you don’t know what you are talking about. This isn’t a case of John Smith and John Smith LLC. Its a case of John Smith and a trust set up by John Smith for the benefit of jtgain. John Smith no longer owns the assets in the trust. They are there for your benefit, not his.
Sure but that’s nothing like what’s going on here. If John Smith had the ability to literally print money and we recognized that John Smith LLC here is really John Smith’s trust for the benefit of jtgain then we can say that jtgain’s claim on the John Smith trust represents something of value, right?
Also the trust is not owned by the government in the same way that John Smith LLC is owned by John Smith. The trust is for the benefit of the beneficiaries not the government.
All of the above are more linguistic sophistry. Yes, the system is set up to where the trust fund is administered and the trustees have a fiduciary duty to me (along with millions of others) to preserve that fund for when I retire.
The title of the thread is “Is there 'money in the Social Security Trust Fund?” I say no. As a beneficiary of the fund, I am legally entitled to collect my retirement. From what monetary source will it be paid? By redeeming treasury bonds, agreed? Where will those treasury bonds be redeemed from? The U.S. Government, agreed? Where will the U.S. Government get the money to pay for the redemption of these bonds? They will print more, borrow more, or tax more, agreed? This is the exactly how they would pay for my retirement benefits without the existence of the bonds.
So since they would pay from future revenues, where is the “money” or the store of value in the trust fund?