Yesterday, I received a “Social Security Statement,” which is supposed to look like some sort of pension statement — only it is not. A pension statement shows how much money workers put into their pensions, how much that money is earning in interest, and how much they can take out.
The Social Security Statement also showed how much I put into the social security and medicare funds — to be honest, not very much, because for most of my career I worked for nearly nothing. But it doesn’t tell how much interest “my” money is earning, because of course the money is all gone — Congress spent it on something else.
“In 2017 we will begin paying more in benefits than we collect in taxes,” says the statement. “Without changes, by 2041 the Social Security Trust Fund will be exhausted.” (Actually, the latest numbers say it will run out four years sooner.) But what is the Social Security Trust Fund? It is a big fat, $2.4 trilllion IOU from Congress, which expects to repay that IOU by borrowing from someone else, or raising taxes, after 2017.