Do you know where your Social Security Trust Fund is located? Where is the $2.6 trillion trust fund that has been collecting Social Security taxes for decades and is considered to be “untouchable” by Congress? This question might be similar to the questions about where the Loch Ness Monster is hiding or where the Yeti is living? Did the federal government place this trust fund in Area 51? Where is it?
Well, it doesn’t exist or at least not in the typical way we expect to see trust funds invested. If you and I were to start a savings or trust account, we would have cash and securities or something physical funding the account that we could touch and withdraw if we needed the savings.
The Social Security Trust Fund has no cash or securities. This trust fund receives I.O.U.s from the federal Treasury, which takes the daily Social Security taxes and includes them in its general fund. The “untouchable” Trust Fund is funded with “special-issue securities” from the Treasury, which are loans that the Treasury must repay.
In effect, the Social Security Trust Fund is a “fairy tale” account that not only is a fiction, but the $2.6 trillion dollar fund promised to the public was spent many years ago. There is nothing left of this fund, but “smoke and mirrors” of the federal government. Each year, Social Security has to obtain money from the Treasury in order to fund its cash-flow deficit. If the Treasury does not provide the cash, there is no fund to cover this amount.
This makes a very interesting lie that the government has foisted on the public. The government has told us for decades that the Social Security has a dedicated revenue stream and a separate “untouchable” trust account that should not be considered as part of our budget deficit. The truth is that the Social Security funding should be part of the federal budget deceit and deficit. It should be included in our federal budget deficit because it comes directly from the Treasury each year just like any other federal payments. It is no different than any other non-funded Treasury expense.