Explaining the Social Security Trust Fund - sm Posted: Oct 11th, 2021 - 1:08 pm In Reply to: DEBT CEILING ANALOGY - Maybe this helps with understanding.
It never existed. From the moment Social Security came into being all money not immediately handed out as benefits was turned over to Congress and spent.
The federal government then issued special “bonds” to itself, which meant that the holder of the bond and the insurer of the bond were one and the same.
The “bond” on one set of books was offset by the corresponding debt on another, they canceled each other out and there were no assets.
FDR and company engaged in keeping double books, something you or I would be sent to jail for.
This would be like if your left hand loaned your right hand money and your right hand issued a promise to repay (after spending the money) AND THEN you went into the bank with the “bond” and tried to claim it as an asset to secure a loan.
You would either discover you’d found the dumbest loan officer that ever lived or they would laugh and laugh … and then turn you in for securities fraud.
Because the American people foolishly trusted their government FDR and company had essentially found the dumbest loan officer that collectively ever lived. It was always from then till now a kind of Ponzi scheme.
But wait!
I hear you say.
Didn’t LBJ start spending the assets in the SS trust and it ran out under Reagan?
So, here’s where we come to what a massive crook LBJ and the Democrats of his day were.
There were no assets. There was a proverbial ledger full of black ink offset by another ledger full of red ink.
For LBJ to spend anything (when the money had already been spent by Congress) he had to ignore the liability (the red ink) and pretend it didn’t exist AND then issue another proverbial ledger complete with new red ink against the black ink elsewhere.
So if the first arrangement, keeping double books, was fraudulent and criminal then the second arrangement simply represented the government insisting money into existence without Congressional approval … basically printing money on the sly,
Poetically we might say that under LBJ they started spending the same moolah twice.
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