The Trust Fund Lives

[Max Sawicky]

The Trust Fund is an account.  Note that
if you have a savings account, "your" money
is never actually in a box somewhere in the
bank.  If you like, the Treasury could print
up some pieces of paper with the word "bond"
and put them in a box next to Alan Greenspan's
bathtub.  Nobody would notice the difference.

The Trust Fund is backed by the majestic
power of the State to extract revenue from
people.  Funny how people -- especially
conservatives -- inflate the big, bad State
but discount its ability to enforce its
financial obligations.

The virtues of the Fund include its role as
a record of aggregate payroll taxes paid
which are dedicated to social insurance.
That they are borrowed for other purposes is
irrelevant.  If the Fund put its surpluses
in a bank, somebody else would still borrow
them for some other purpose.  One entity's
saving is always another's borrowing.

The Keynes quote is illuminating but
irrelevant.  The trust fund does not
make actual provision for future consumption.
Finance cannot do so, as Keynes via Doug
point out.  Rather, the Fund helps to
establish future claims to consumption.
Who gets what is, among other things,
an accounting matter.

Left and right attacks on the legitimacy
of the Fund weaken the future claims of
workers to their benefits.

Cheers,

MBS