Of course there is a SS Trust Fund, just like there is a Medicare Trust Fund, Federal Pension Trust Fund, etc. They are a reality and show up as part of our $17 trillion national debt under "Intragovernmental Holdings." I never said they were an asset to the USG, but they are an asset to the SSA, which uses them to pay benefits. To make it a little simpler for you to understand, the Chinese consider the $1 trillion it owns in US T-bills as an asset. We consider it an unfunded liability. The SSA considers the Trust Fund as an asset backed by the full faith and credit of the US. The USG considers it as a debt, which is why the SSTF and other trust funds are included in the national debt and they count against the debt ceiling.
SS would not operate the same way without the Trust Fund. SS went into the red in 2010 and will continue to do so until the SSTF runs out of money. Under the law, benefits are tied to the revenue taken in by the SSA thru the payroll tax. Benefits can only be paid up to the amount the SSA has available. Without the SSTF to make up the shortfall, SS benefits would have had to be cut in 2010 by law and every year thereafter.
All benefits payments are made from the General Fund. Always have been, always will be. All FICA taxes collected have always gone into the General Fund, always have, always will. You could use those really fancy pieces of paper to record the payments, or use a spreadsheet on a PC, it doesn’t make any difference, the money follows the exact same path.
Sorry, but that is simply not true. The payroll tax collections go into SSTF, which is used to dispense benefits. They don't go into the General Fund.
The Social Security Trust Funds are the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) Trust Funds. These funds are accounts managed by the Department of the Treasury. They serve two purposes: (1) they provide an accounting mechanism for tracking all income to and disbursements from the trust funds, and (2) they hold the accumulated assets. These accumulated assets provide automatic spending authority to pay benefits. The Social Security Act limits trust fund expenditures to benefits and administrative costs.
Benefits to retired workers and their families, and to families of deceased workers, are paid from the OASI Trust Fund. Benefits to disabled workers and their families are paid from the DI Trust Fund. More than 98 percent of total disbursements in 2012 were for benefit payments.
By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.
In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.
How accurate were your magic Trustees at predicting a lost decade of economic stagnation? How can you trust that their crystal ball is correct that 2018 is the year the US economy magically starts to grow, when all Economic growth for the past 5 years has been less than the borrowed money added to the National Debt. But, again, none of that matters because the Trustees are making calculations based on magic paper.
I gave you the methodology and actuarial basis for their projections. The SS Trustees have predicted with some precision exactly where we are now. They have moved up the dates when the funds are exhausted by a few years, but like life insurance actuaries, they crunch the numbers and come up with some fairly accurate numbers.
Source: CBO “Combined OASDI Trust Funds; January 2011 Baseline” 26 Jan 2011. Note: See “Primary Surplus” line (which is negative, indicating a deficit)
Ponzi schemes collapse, you admitted that Social Security is a Ponzi scheme, and you say it must be reformed. Yet in effect you stated earlier that one solution is to make it a bigger Ponzi scheme by feeding more money into it.
I have said all along it was a Ponzi scheme and unsustainable. You can make it sustainable by reducing benefits or increasing revenue or some combination thereof. It was done in 1983 when SS was in the red.
Why Social Security is a Ponzi Scheme
The progressive income tax is unconstitutional. It is well documented that the 16th amendment was never properly ratified by a sufficient number of States, and the US Government has been lawlessly funded for over 100 years. Are you trying to convince me how good it is since it’s deeply ingrained in society?
It is the law of the land. And I brought it up to demonstrate that the government has been in the redistribution of wealth for a long time and that we are well on the road to socialism with Medicare, Medicaid, SS, food stamps, etc. One out of every two Americans receives a check from the government.
We are not well down the road to Socialism, we have been there since the 1930s. We are well down the road to the consequences of socialism, which is collapse. I find it difficult from reading your closing paragraph to tell whether you are for or against it.
I think you must have a reading comprehension problem.
The progressive income tax started in 1913. The Socialist Labor Party (founded in 1876) and the Socialist Party of America (formed in 1901) looked to European models. Prior to that various utopian communities were formed as early as 1825 that embraced socialist type values.
Eugene Debs was the candidate of the Socialist Party of America for President of the United States on several occasions. Debs received 5.99% of the popular vote (a total of 901,551 votes) in 1912, while his total of 913,693 votes in the 1920 campaign remains the all-time high for a Socialist Party candidate.