Is The Government Able and Willing to Repay Social Security Debt?
The short-term solvency of Social Security is in the hands of the federal government. Enough payroll taxes have been paid to cover full benefit payments until 2033. But $2.7 trillion of that money was taken by the government and spent for non-Social Security purposes. The spent money was replaced with government IOUs, called Special Issues of the Treasury. The public has been misled about the true nature of these IOUs for the past 30 years. Most Americans seem to have the impression that the IOUs, held by the trust fund, are like the marketable Treasury bonds which China and other lenders hold. But the IOUs are very different from marketable Treasury bonds. The IOUs cannot be sold to anyone at any price, and they can’t be used to pay benefits. The only way the IOUs have any value is if the government is able and willing to pay back all of the $2.7 trillion….The $2.7 trillion taken from the Social Security trust fund, and spent for non-Social Security purposes, must be repaid. That money was contributed by working Americans, and it belongs to the America people collectively. Read More…