Maybe she ought to read the Social Security Administration's FAQ.
http://www.ssa.gov/OACT/ProgData/fundFAQ.html#n2
quote:
What happens to the taxes that go into the trust funds?
quote:
Tax income is deposited on a daily basis and is invested in "special-issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.
These "special-issue" securities are US Treasury Bonds with special rules. Bonds, by definition, are IOUs:
http://www.investopedia.com/terms/i/iou.asp
quote:
Why do some people describe the "special issue" securities held by the trust funds as worthless IOUs? What is SSA's reaction to this criticism?
quote:
As stated above, money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.
Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.
The SSA folks don't like the term "worthless IOUs", but they are certainly IOUs that are "backed by the full faith and credit of the U.S. Government" -- i.e. the taxpayer. Fine, as long as we don't overspend like Greece.
Congress spends SS taxes, along with the rest of the general fund, as fast as it can -- and then some. This is a trust fund with Congress as the fund manager. Doesn't that give you warm fuzzies? Did Ms. Lee or the TD editors forget about Mr. Gore's "lockbox"? He promised to keep the SS tax from being shoveled into the general fund. Whether he could have done that is another matter...
Earth to Marilyn: Gore didn't win. There is no lock-box -- never has been. Bonds are IOUs.
