Social Security trustees have once again sounded the alarm about the program running out of money.
In reality, the federal government has infinite dollars. As former Fed chair Alan Greenspan admitted, “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.” Federal spending is limited by things to buy, not by dollars.
Ask yourself: Why do SS and Medicare have trust funds but Defense, Transportation, Education, and all other departments do not? The trust funds are accounting gimmicks originally intended to comfort recipients but now used to justify cutting benefits. They are nothing more than numbers on a spreadsheet. When it comes time to pay benefits, the government will create new dollars using computer keystrokes, the same way it pays for everything.
Claims that the trust funds will run dry actually mean that the laws establishing those funds will no longer authorize payment of full benefits. The problem is not the ability to pay but rather the legal authority to pay. Congress could change the law to authorize full or even increased benefits. In fact, that is exactly what they did when they set up Medicare’s Supplemental Medical Insurance (SMI) trust fund. It is solvent forever because of how its law was written. Congress could easily modify the SS and Medicare laws to permanently preserve full or expanded benefits.
Better yet, let’s drop the trust fund charade and just pay benefits at the level needed by recipients.
