Contrary to widespread belief inside the Beltway, the Social Security System will not run out of money anytime soon.... I'd rather have real money ... not the funny money that is stashed as IOUs in a West Virginia filing cabinet ...http://www.washingtonpost.com/wp-dyn/content/article/2010/08...Social Security, the trust fund and funny moneyBy Allan SloanTuesday, August 10, 2010There's real money, then there's funny money -- stuff that looks real but isn't.Today, let's talk about one of the world's biggest piles of funny money -- the $2.54 trillion Social Security trust fund. It matters now because Social Security revealed plans last week to tap the fund for $41 billion this year and will begin tapping it on a regular basis in less than five years.This year's cash deficit, the first since the early 1980s and the biggest ever, means the government will have to borrow money to redeem some of the Treasury securities in the trust fund. Even at a time when Uncle Sam is borrowing $1.5 trillion a year to keep his checks from bouncing, $41 billion is real money. Here's why the trust fund is funny money. Let's say I begin taking Social Security when I hit the full retirement age of 66 later this year. Because its tax revenue is below its expenses, Social Security would have to cash in about $3,400 of its trust-fund Treasurys each month to get the money to pay my wife and me. The Treasury, in turn, would have to borrow $3,400 from investors to get the money to pay Social Security. The bottom line is that the government has to borrow money to pay me, regardless of how big the trust fund is.
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