To the Editor,
Is the Social Security Trust Fund empty because Congress borrowed and spent the money? No. The Fund invested the money in U.S. treasuries, and it will be repaid as needed.
Suppose you were in charge of the Fund. Once the current year’s payments were made, what would you do with the billions of left-over dollars needed to fund future payments?
Would you stuff them in a coffee can and bury them in the back yard, where they would earn no interest and thereby lose purchasing power?
Would you perhaps invest the money in the stock market, where it would be nibbled away by brokerage fees and vulnerable to market crashes?
Or, would you safely invest it in U.S. treasuries, where it would earn low to moderate interest, but you know it would be there when needed?
Did Congress spend it? Of course they did. When you borrow money, you do so to spend it. Would you borrow money — and pay interest on it – just so you could run your fingers through it? Or, would you borrow only to buy a house or start a business? …and pay it back, a bit at a time.
The U.S. government borrows money, uses it, and pays it back. It never has reneged on a debt; not one borrowed from China, or a pension fund, or its own citizens. Unless Congress does something even stupider than their current doddering, it will not renege on this debt either. The money is there.