> I think the whole idea of "prefunding" is what some of us are arguing
> against. The fact is, there can be no prefunding - however you account
> for it, the government will always be taxing one set of people to pay
> another. The "surplus" is a way of shifting revenues from the
Nothing in principle prevents the Federal government from buying however many trillion it needs of stocks and bonds and vesting ownership of these in the Trust Fund. How this is financed is irrelevant to the fact that this is pre-funding.
We might fear for the government's solvency as a result of this move, but it is still pre-funding. This does not contradict Keynes or validate the premise that such a policy is necessary or helpful. You, Keynes, and Doug are right in the sense that the terminology is misleading.
MBS