Further thoughts on the program in peril.Is there a Social Security crisis or not? To hear some tell it, the Social Security Trust Fund* is insolvent, nothing but a collection of “worthless pieces of paper.” To hear others tell it, the Social Security Trust Fund has a surplus of 2.5 trillion dollars (and growing), composed of “good as gold” US-government issued securities.
These positions are usually associated with “conservative” and “liberal” camps, respectively, although, as usual in American politics, these labels are not particularly helpful. Whether one supports or opposes Social Security is a matter of principle, and does not depend on the value of the securities presently in the Trust Fund. Those who oppose Social Security will do so if the securities are “good as gold,” and those who support it will, or should, do so even if those securities are “worthless.” Whatever political challenge it might pose for the side we favor (and here, that is definitely supporting Social Security), an honest evaluation of these securities is necessary in its own right, in order to help us prepare effectively for whatever political challenge we face. Politics is not the art of making people think it will be easier to achieve their goals than it actually will be.
Since it is the value of these “securities” about which the two positions on the Social Security “crisis” so vehemently disagree, in order to understand how they are both right, and all wrong, one must take a careful look at the specific economic and political characteristics of the securities in question. It is also necessary to understand the hijinks that have been happening with the Trust Fund over the past 30 years.