- The Washington Times - Thursday, February 16, 2012

I believe that The Washington Times’ standard of journalistic excellence is among the best in the country. But I was disappointed in the reporting in “Social Security reserves forecast to run dry in ‘22.” (Tuesday, Page 1).

The thesis of the article was that the country will face a problem when the Social Security Trust Fund is exhausted. In reality, the trust fund is an accounting fraud. It merely records the surplus taxes that were collected in years past and spent on other government programs. It has zero value today. If you don’t believe me, write on a piece of paper, “I promise to pay myself $5 million.” Sign it and then try to use it to buy a fancy house. You’ve just created your own version of the Social Security Trust Fund.

The truth is that the trust fund has been insolvent for the past two years. The money that is paid in benefits exceeds the money that is collected from taxes earmarked for the purpose. The shortfall is made up by borrowing money. It adds to the total federal deficit and the outstanding debt of the nation. The fact that a bookkeeping entry is made in the trust fund has no financial meaning whatsoever. Social Security is insolvent.

Many highly regarded economists believe that the nation’s debt crisis is on the verge of overshadowing the travails of Greece. If the debt continues to grow, we are just a few years away from massive national insolvency or runaway inflation, either one of which will render all savings and retirement plans (including Social Security) worthless.