bmetzler's Journal: The Social Security Trust Fund

In January 1983 the Social Security Administration started to intentionally build up a large surplus in the Trust Fund to provide excess revenue to help pay for the retirement of the babyboomers in the early decades of the 21st century.

I've come to realize that the reason for most of the opposition to Social Security reform is a basic lack of understanding of what the Trust Fund is.

So, I'm starting this JE to solicit reponses from the slashdot crowd. I'd like to learn what you understand the Trust Fund is, how it works, how it's intended to work, whatever other comments you have.

Thanks for your feedback.

why

[capoccia]

why does it matter what the trust fund is? even if there was no trust fund, the government has obligated itself to recieve payroll taxes and pay out benefits. no legislator in their right mind will put their hand in to interfere with the machinery--it would be chopped off.

Re:why

[robi2106]

no legislator in their right mind.............

ummmmm ok.

Asside from the initial sarcasm in my comment, there are other things to be said. Some legislatures would not have problems, like the big names. McCain. That guy just shouts logic and common sense so if he starts wading into it he will survive.

jason

I understand the trust fund to be

[Marxist Hacker 42]

Excess FICA taxes, taken starting in 1983, put into government bonds and bank accounts, to gather interest against the day that there are more retirees than workers paying in.

Or that is what was intended- at this point it's $1.5 trillion in government bonds, with no way to pay back those bonds, and an implicit promise from Bush that those bonds will not be paid back. In 2018, it will be $5 trillion in bonds.