>>>>It seems to me that there is a lot of debate about exactly what are the 'assets' in the Social Security Trust Fund. I don't know if I
understand everyone's claims, but I do know that no one seems to have a complete understanding of exactly how the Trust Funds
operate.
The problem is really that we all claim to understand, but that our 'understandings' are all different.
>>>>Just as a public service announcement, so that maybe we can get past the useless arguments over who is right about the
structure of the Trust Fund, and address the actual question, which is what are the options for reform (i.e. exactly what do we do now
to solve the crisis).
I understand your frustration with the debate, but it really is important on a number of levels. First, it directly impacts in an important
way on the financial condition of SS. That has significant importance on whether SS should be reformed, and if so, what funds are
available for transition costs. Secondly, if the TF is a scam pulled by the gov't (and I do NOT think that it is), then we would probably
want some form of privatization on that basis alone. Finally, if we can't agree on what today's reality is (and it really isn't all that
complicated), it is unlikely that we can agree on what the future holds in terms of projections from one side or the other. The debate is
far from 'useless'.
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The trust fund reality in my view is as follows: a) current beneficiaries get below market returns for their contributions- there is ample data, from private retirement plans from local governments and private enterprises, to support this claim; b) the federal government has an additional pool of money to satisfy its spending habits; c) our children, who have no voice in this matter, are liable, through higher income taxes, for our spending of that money; d) our children will have to pay higher payroll taxes to support us in our retirement.
Taking the trust fund funds off-budget does nothing to alleviate SS impending problems because the money would sit in a vault loosing value to inflation; this would amount to stashing your savings under your mattress; not a wise decision!
Taxing is the means by which government generates revenue, so money spent today has to be recovered through taxation, so that the debt generated by us and our future benefits can be paid.
