Actually, the “trust fund” had been spent long ago.
Turning excess over to Congress to fritter away had been SOP from the beginning under FDR. It has ALWAYS been an unethical con.
What they then did was to pretend that the same entity could own the debt and owe it too. This created the illusion of having an asset even though it was exactly countered by a matching obligation.
What LBJ apparently did was, at least on the surface of it, a reform. He did away with the accounting trick and simply it was unsecured “debt”.
But what about his spending the trust fund, that ran out early in Reagan’s time you ask?
Well, it seems that LBJ started spending the black ink in the ledger in Treasury’s right hand ignoring the corresponding debt on the ledger in its left hand. Since the asset was spent it seems that new debt was issued to cover the now expended “asset” (which was no asset at all).
So he basically spent the same money twice, which is a pretty groovy con even the mafia would be terrified to attempt, though the reality of it was they were creating money out of thin air.
Incidentally, in the past I’ve pointed out that beginning around that time till the time that the “money” (black ink in the ledger) ran out there was upwards inflationary pressure that just wouldn’t go down.
I’m sure it’s a coincidence that it went down soon thereafter. Trust me, it has to be....
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