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Politics : Politics for Pros- moderated
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To: unclewest who wrote (112197)5/2/2005 1:04:37 AM
From: TimF  Read Replies (1) of 793955
 
Agree. Though I see nothing small with the fund becoming insolvent.

I said smaller, not small, but I don't really think the problem is really bit.

Its not as big because, as you yourself said, the trust fund is in government IOUs. All these IOUs are from the government to the government. If they where canceled the governments net position would be unchanged. The "trust fund" is effectivly worthless.

When SS starts paying out more than it brings in and so when it could be said to be "drawing on the trust fund", is really a more important date than when the trust fund runs out.

Was not my intent. I was commenting on what I perceived your argument to be and the hole I see.

Then you didn't understand what I was trying to say either through my fault or yours.

When you consider SS in isolation, as if it wasn't part of a larger government, the trust fund is real. However it doesn't make sense to consider social security as isolated. If I could isolate part of my finaces I could create a huge "assett" is one of the isolated "funds", by creating a debt in the other, but I wouldn't be any richer because I owned this "asset".

The SS trust fund is about as much of an asset as a loan from a 401K is an asset. You could consider the loan to be an debt for your "not-retirement fund", and an asset to your 401k fund, or you could just consider it as being neither an asset or a debt, it doesn't make much difference either way. Every dollar in the asset is off set by the same amount of debt.

Tim
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