Yes, but the Treasury debt was special non-negotiable issue. In essence, the feds were writing themselves IOUs that amounted to a promise to tax the living daylights out of children not yet born to keep the Ponzi scheme going. Of course, Ponzi schemes must always collapse, and many of us here are part of the “lucky” generation that will be left holding the bag. Still, that is better than continuing with intergenerational theft that SS represents.
Yes, you’re right.
The problem is that the SS fund had all this surplus cash.... and the question becomes “OK, what do we DO with this cash?”
Well, they could leave it as cash, returning 0% yield, and suffer the effective negative return of inflation.
Or they could invest it in something.
Now things start going sideways, *fast*. How do you “invest” this surplus from this regular income stream and not distort some debt issuance? To be as “safe as possible,” you can’t invest it in private sector debt, or stocks, or even state debt.
Because of the size of the funds involved, there’s no way you could invest it in a great many things without causing a bubble.
But as you say, all Ponzi schemes collapse. This one’s collapse is being accelerated by the size and persistence of the US budget deficit.