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This is not the forum for advancing points of view. Just the facts, please. Mulp 06:33, 12 January 2007 (UTC)
This statement is incorrect. First of all government securities are marketable assets, and second it is perfectly legal for a company to invest its pension funds in government securities.
:Practically speaking, the federal government has used the Social Security Trust Fund in a way which would be illegal for any private-sector company to do - in order to help balance the federal budget, the government has borrowed money from the Trust Fund to pay current operating expenses and replaced those funds with government IOU's --- This "correction" is incorrect. It would not be "perfectly legal" for a company to "invest" its pension funds in its own securities - whether they were marketable or not. Corporate execs go to jail for that sort of chicanery.
Not true, I worked for a Fortune 100 company that forced all 401K contributions to be in their own stock, there were no other options.
—Preceding unsigned comment added by 71.226.211.90 ( talk) 16:22, 18 March 2010 (UTC)
"All securities held by the trust funds are backed by the full faith and credit of the United States Government, as required by law. Those currently held by the OASI Trust Fund are special issues (i.e., securities sold only to the trust funds)" http://www.ssa.gov/OACT/TR/TR03/III_cyoper.html You can not buy or sell these special issues on the market. The insert in the main article from the 2000 budget is absolutely correct. Once the social security taxes fall below the retirement insurance requirements (2015?), other taxes or government debt or reduced federal spending in other areas will be required to meet the entitlements of the social security recipients. There is no money as we understand it in any US Government trust fund. Lamar White lamarw@easystreet.com
Most U.S. government bonds are marketable, but the ones held in the Social Security Trust fund are not. The two statements above are correct. I do have a problem with the bolded portion though and feel the whole second paragraph should be deleted outright. I'd make the changes myself but I'd probably come under attack from some wacko who sees this as an attack on his political ideology, ingores the facts, and revert my good-faith edit. Wiki was great starting out but too many overzealous conservatives and liberals alike will modify or revert articles on political issues in order to fit their own agenda.
I was intending to categorize this article, but can't figure out the appropriate category? Should it be USA government, Economics ??? Would be good if someone stamp some category down there. gathima 16:01, 18 Jun 2005 (UTC)
There is NO Social Security Trust Fund. Any politician who says otherwise is lying. Gore actually had a good idea about that "lockbox." Username:BRivera
This article is Littered with politically motivated falsehood and disinformation. It is trying so hard not to upset right wing ideologues it is near useless. If wikipedia is going to became the home of semantic ideowarfare then wikipedia is going to become a useless rag.
By social security trust fund every american interested in the subject knows that in reality means debt owed to social security recipients for money borrowed from the system. That the last half of this article has become a disembling apologetic to ideologues hurts, not helps, its credibility. If an "explanation" of trustfund is needed it can be worded just as i did above. —Preceding unsigned comment added by 173.246.203.152 ( talk) 23:46, 10 February 2011 (UTC)
Technically, the surplus is not a trust fund because it has been raided by its fiduciary with a bunch of "IOU"'s left behind. In the private sector, this sort of embezzlement would be illegal. 71.105.98.185 ( talk) 07:39, 28 May 2012 (UTC)
I believe in 1964 under LBJ the Congress transferred the Social Security funds to the general fund. The SS Trust Fund exists in name only - ie $5.x trillion are in the national debt ( source:this article) not a good place to keep a trust fund. Once the surplus - $2.6 trillion is gone, how do you tap a national debt? — Preceding
unsigned comment added by
2601:181:8301:4510:305E:3C1E:43BA:6F31 (
talk)
22:34, 4 April 2018 (UTC)
The "Is the Trust Fund Real" (economic perspective) lacked any sources whatsoever. As Wikipedia's Verifiability policy explicitly states:
The threshold for inclusion in Wikipedia is verifiability, not truth. "Verifiable" in this context means that any reader should be able to check that material added to Wikipedia has already been published by a reliable source. Editors should provide a reliable source for material that is challenged or likely to be challenged, or it may be removed.
If the analysis that section offered was accurate, then finding many
reliable sources from the field of economics to document it should be easy. If the analysis was, instead, the conclusion of its contributors, then it was
original research and should remain deleted.
-
Kelly Ramsey
21:10, 9 February 2007 (UTC)
With all due respect, unless a quotable source for the discussion of the analogy to bank deposits exists, that entire discussion should be removed, both because without citation it is unsubstantiated opinion, and because it is itself faulty. The trust fund is mostly smoke and mirrors with respect to funding because its assets consist of IOUs written by the government to itself.
To indulge in the vice of analogy myself, if I earn $100, write an IOU to myself for $100, and then spend $100 on current operating costs, my net worth is $0, not $100, notwithstanding that I continue to own an asset - my IOU - with a face value of $100. For that IOU to be satisfied other than by cancellation, the funds must come from my future income; in the case of social security, that means higher taxes. The trust fund is an accounting artifact with little economic substance. See, e.g., Daniel Shaviro, Making Sense of Social Security Reform, the University of Chicago Press, 2000. Tisias 02:45, 24 April 2007 (UTC)
Re: "A faulty analogy is sometimes made with an individual who deposits $1000 of his salary into a bank account but then applies to the same bank for a $1000 loan to buy a plasma TV. The analogy with Social Security falls apart because Social Security has never borrowed against its own assets to spend on other programs." - The analogy isn't faulty, at least not for the reason you say it is. The federal government is lending money to itself. It is the equivalent of the person who deposits $1000 and then borrows and spends $1000, not the Social Security Administration in isolation. Its not the best or clearest analogy, but I'll provide another one. If I take $100 from my left pocket, and put it in my right pocket, than I write an IOU (Left pocket, IOU $100, sincerely, right pocket). It doesn't make much sense to talk about the IOU as an asset. Even if the right pocket pays interest on the IOU (making it more like a loan or bond) it still isn't a real asset, because my "left pocket account" and my "right pocket account" are part of my overall financial situation, they aren't really separate entities. Similarly the Social Security Administration is part of the federal government. The feds can create any number of organizations and accounts, but moving cash from one to the other doesn't improve its balance sheet. Twfowler 23:04, 7 November 2007 (UTC)
This is a political opinion as opposed to objective fact and in fact this article is riddled with this rather bad ideological macroeconomic ideology that is indeed not based in objective fact. If this article is to gain any legitimacy at all the intentional false dichotomy and ideology need to be removed and there needs to be a simple, concise, logical explanation to the novice what "social security trust fund means". To wit a simple explanation that americans paid a certain amount into the social security system, that the government borrowed that money and owed a debt to the system is the objective fact. Right wing ideology is not. —Preceding unsigned comment added by 173.246.203.152 ( talk) 23:50, 10 February 2011 (UTC)
The real problem with the SS Trust Fund is not its existence but how it's invested. The special-issue Treasury Bonds in which the TF is now invested returned 5.5% in interest earnings to the TF in 2005. The Social Security Administration is essentially giving TF money to the Treasury to cover the National Debt. When the special-issue bonds expire, they are simply rolled over to a new issue. This is an irresponsible way of investing Trust Fund money. The SSA could get better rates of return on TF investment by buying municipal or corporate bonds. Moving TF investment into the private sector would provide stimulus for the national economy and make money available for growth. It would inject liquidity into the TF where none exists now. It would also remove any question as to the actual existence of the Trust Fund.
Sooner or later, the Federal Government must begin paying down the National Debt. The stability of the Dollar demands it. When SSA begins seeing a shortfall in FICA funding, it will have no recourse but to begin cashing its Treasury Bonds. It would much better to adopt a program of regular bond retirement than to wait for a day of reckoning. Virgil H. Soule ( talk) 08:57, 25 September 2008 (UTC)
When describing the Social Security Trust Fund, we must be careful to describe it as it is.
Since it holds no true assets, it makes no sense to call it a "fund" except when referring to its proper name. I have seen nothing to lead me to believe it is anything other than an accounting scheme.
If GM's Chevrolet Division borrows and spends money from GM's Pontiac Division, is there any true fund? No. Same with Social Security when other branches of the federal government spend Social Security's surpluses.
Novasource ( talk) 03:36, 26 October 2008 (UTC)
The following are some combination of nonsensical or inappropriate for a Wikipedia entry. I've moved them here for posterity in case someone wants to clean them up. Novasource ( talk) 03:42, 26 October 2008 (UTC)
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This contributor is correct, "Practically speaking, the federal government has used the Social Security Trust Fund in a way which would be illegal for any private-sector company to do - in order to help balance the federal budget, the government has borrowed money from the Trust Fund to pay current operating expenses and replaced those funds with government IOU's" This contributor is also correct, "The economic question is NOT whether the bonds represent legal obligations that will be fulfilled, the economic question is whether the U.S. bonds held by Social Security represent savings by allowing Social Security taxes collected in the past to reduce the need for taxes in the future." The best analogy (though not perfect, of course) is that of the 401K - also a retirement program, (the difference being, in real life you have a separate account). But let's just look at what happens when your employer collects the money. Legally he has a limited time to deposit it in your account. But, to carry the analogy, suppose he didn't. Suppose he just put an IOU in your account instead. Suppose he then spent the money, telling you, "I'll guarantee your payment with the full faith and credit of our company" as he continued to collect more contributions from you and other employees. That is precisely what the Federal Government has done. The ... money ... isn't ... there - at least not sufficient money. With the declining work force and increasing numbers of retirees, the Federal Government has a few choices; they can raise the retirement age, they can cut benefits, they can print money to pay the IOUs. So far, with the exception of the slight raise of the retirement age in the '80s, they have chosen option 3 in the article, they have monetized the debt. I am sure there are partisans that participate in this article that will say I am biased, an idealogue, etc. Instead of those ad hominem attacks, I would encourage them to point to one element of the above which is not factually correct. — Preceding unsigned comment added by Ecgberht1 ( talk • contribs) 15:26, 19 June 2011 (UTC)
The government borrows the money from the fund and uses it directly to pay outstand bills. So yes, that dollar collected could be a dollar now spent. But the Don't make it more compliacated than it needs to be. As the laws are it is just a loan that has to be repaid and intrest has to be paid until the loan is repayed. Since the budget is not balanced, borrowing money from the fund reduces the amount of money than needs to be raised by selling other instruments to others to raise money. In theory, it's better to owe it to the trust fund that, say, the Chinese. The amount in the SS trust fund, plus what is being collected in payroll taxes are sufficent to pay benefits at current levels
This should not be a static page. Since the page contains information from reports it needs to be updated to reflect current numbers, not 8 year old ones where the text uses the word "are" when quoting old outdated documents Jackhammer111 ( talk) 22:18, 27 October 2018 (UTC)
This article has been turned into a polemic. It's full of allegations stated as facts ("All money represented by the Fund has already been spent on other federal government programs") and scare quotes. As bad as the old article may have been, it was 100% better than this diatribe. — Malik Shabazz ( talk · contribs) 05:07, 26 October 2008 (UTC)
This article is astounding. It's just repeats the official line and doesn't bother to present reality.
The only way the non-accounting fiction side works is if you pretend the SSA is not part of the federal government. Um, what?
The SSTF is an internal IOU. It is utterly meaningless in any sense other than internal accounting. I'm amazed Wikipedia editors cannot see this.
68.95.132.42 ( talk) 02:43, 1 November 2009 (UTC)
This article starts fifty years after the establishment of the Social Security Trust Fund, and fails to report the primary piece of information that most people would consult it hoping to find, namely, when did Congress begin raiding the Social Security Trust Fund for general expenditures, i.e., other than paying Social Security benefits, removing actual cash and leaving in its place a cynical and useless pile of never-to-be-paid "I.O.U.'s."? Who was president when that ugly and dishonest practice started, and which party controlled Congress? Have all administrations and Congresses done it since that time (yes)? Was the fund ever operated properly, as a true trust fund?
Clearly if it had always operated as a true trust fund, the federal government could long since have ceased collecting the tax, since the accrued cash properly and safely invested would now be generating more than enough increase to pay all Social Security benefits without further collection.
It is also clear that if anyone in the private sector operated a trust fund in the that Congress at some point began operating this one, the rascals would soon be indicted for theft, fraud, and/or embezzlement. The single most important reform that could be done in the federal government today would be to keep Congress' sticky fingers out of the Social Security Trust Fund for general expenditures, and let the money pile up for the purpose for which it was created.
King Alexander ( talk) 08:51, 7 January 2010 (UTC)
The $2.5 Trillion in the trust fund exists because revenues have exceeded payouts for a number of years. Since the excess revenues have not been invested in any tangible economic assets, they simply represent cash which has been taken off the market. This has had the net effect of reducing the overall money supply. The act of paying out these benefit without taxing is just the same as having the government increasing the money supply. The inflation implications of this are obvious... —Preceding unsigned comment added by 70.112.205.72 ( talk) 22:37, 28 March 2010 (UTC)
The article describes the Social Security Trust Fund as a "pay as you go" system. I'm not positive but I don't think that's correct. I think the earliest beneficiaries were drawing funds which had not yet been collected. ? —Preceding unsigned comment added by 64.85.147.195 ( talk) 14:47, 8 December 2010 (UTC)
The article states that "The trust fund contains the securities that will be redeemed to make benefit payments in the future when contributions derived from payroll taxes and self-employment contributions no longer are sufficient to fully fund then-current benefit payments."
I'm aware that various politicians have described the trust fund in these terms; however, if this description is accurate, there would no difficulty making Social Security payments in the event that Congress does not raise the debt ceiling before Aug. 2, 2011.
And yet, President Obama stated "I cannot guarantee that those checks go out on August 3rd if we haven't [raised the debt ceiling]. Because there may simply not be the money in the coffers to do it." [1]
This fact demonstrates that the Social Security Trust Fund is, at best, nothing like what the Wikipedia article claims it to be. Isn't it time that the article begins to reflect reality? Wikipedia is not a place to sell pipe dreams. Novel compound ( talk) 08:09, 20 July 2011 (UTC)
It seems to be universally accepted that large debts to foreign lenders carry risks that debts to domestic lenders do not. The classic example is how the U.S. pressured the U.K. to cease hostilities during the Suez Crisis by threatening to sell some of its holdings of Sterling Bonds (see Suez_crisis#Financial_pressure). Presumably there are sources that discuss borrowing from the trust fund as safer than borrowing from, say, China. I hope that someone who knows this topic better than I do will draw upon them, and extend the article. ThomHImself ( talk) 21:03, 11 September 2011 (UTC)
I've been doing some research on the SSA as a part of larger work on Sovereign Wealth Funds. It seems to me that there is no such this as the 'Social Security Trust Fund' in law. There are two funds related to Federal Insurance Contributions Act for Social Security - the OASI (Old Age Surviors Insurance TF) and the DI (Disability Insurance). There is no such fund as the "Social Security Trust Fund." I grant that this usage is very common (in fact, SSA uses the phrase itself), however that doesn't change the fact that it is a kind of shorthand for the two funds, which are legally and financially separate. My initial thought was to create a Disambig that pointed to new articles, one each for DI, OASI (and perhaps the two medicare trusts as well) (and blank the content from this article). It occurred to me that first, there is not very much information available (to make an article) on either fund and that this might make it harder to find the information on the funds, however - so my second idea was to rewrite the article to make it much more clear that there is no such "Fund" as the "SSTF" - that there is a *political* concept of the SSTF and make the article about that, with a section on structure (basically rewrite the structure section and header of this article).
Any thoughts on that? My intention in all this is to clarify the position; right now the article seems like it's a discussion of the political concept of the SSTF - which is fine, but it doesn't really expose the *workings* of the thing very well. Sahrin ( talk) 17:41, 20 January 2012 (UTC)
It would be nice to list the size of the fund, and it would be great if there were a chart showing how the size has changed over time. 96.238.40.229 ( talk) 22:44, 5 May 2012 (UTC)
My problem with this piece as it sits is not that it seems chatty or essayish... it's that it descends into macroeconomic jargon that even I, someone who pays some concentrated attention to the topic, can't quite follow without falling off. Notably, in the Discussion section (which is somewhat essayish, but properly so IMHO), the phrase "real economic savings" is used multiple times, as the fulcrum of the argument, but with no real way to determine, either from context, or explicitly, whether what it means is "an increase in the amount of money in the American economy which is considered to be 'savings' rather than 'liquid assets/cash/checking' by whoever owns it", or whether it means "a reduction in the amount which is being spent by $UNNAMED_PARTY". Since it seems important to know which, the entire section falls apart; this stuff probably needs to be unpacked one more layer by a competent economist who speaks English.
--
Baylink (
talk)
22:07, 25 February 2013 (UTC)
I would suggest this article suffers from NPOV:undue weight do to the fact that it only mentions the 2011 report, and no reports prior or since. The number of years out that the trust fund would be exhausted changes each year - because revenue and GDP growth predictions change each year - sometimes moving out a year or two, sometimes moving in a year or two. It is true that we're no consuming the trust fund, which makes its end date less theoretical; but the end date has been about fifteen to twenty years in the future for the last two decades. This article does not seem to have that perspective. 99.104.126.16 ( talk) 21:35, 17 July 2014 (UTC)
I have updated it to the most recent report, in which the end date is 2034 and was not advanced from the previous year. I hope a more experienced Wikipedian can fix the citation reference text to be more to standard, but I did link the citation. 136.58.109.44 ( talk) 09:12, 25 April 2021 (UTC)
I removed a section that copies exactly material that claims to be copyrighted, see here.
68.111.139.195 ( talk) 13:03, 20 July 2015 (UTC)