Folks who support the destruction of Social Security are fond of saying that the Social Security Trust Fund has no real assets; it’s broke; it’s just a bunch of worthless IOUs. For example:
- "The trust fund is bankrupt; it is IOUs from the government." (spokesman for Rep. Jim Nussle (R-Iowa), House Budget Committee chair) [*]
- "The Social Security trust fund is merely an accounting device filled with IOUs that future taxpayers must repay." (David John of the conservative Heritage Foundation) [*]
- "The problem is that the trust funds consist of a stack of IOUs." (Concord Coalition) [*]
- "[The trust fund] cannot work because it has no independent assets." (ex-Rep. Nick Smith (R-Mich.)) [*]
Gosh, that’s terrible! Relying on government IOUs seems like a really bad idea! Is what they’re saying true??
Well, yes, in a sense: the Social Security Trust Fund contains not cash, but US Treasury bonds, that is, promises from the US Government to pay stated amounts on the stated dates. But "worthless"? Please. US Treasuries have generally been thought to be the safest of investments — and with good reason: the US has never defaulted on its debts.
In fact, these investments are so safe that our very own President has invested heavily in them — to the tune of somewhere between $4.75 million and $9.756 million (federal disclosure forms only require reporting of a range of values, hence the uncertainty). Hat tip: Josh Marshall.
So, Mr. President, is your roughly $5-10 million bucks in treasuries just a bunch of worthless IOUs that you can’t rely on when the time comes? Or is it what everyone thinks it is: a promise that will be kept come hell or high water? And if it’s the latter, why isn’t the same true for Social Security?
Our friends at the Daily Howler do a superb job of debunking the "worthless IOU" myth here.
