If you're paying down debt you're not financing general expenditure. In that sense, the Trust Fund bonds have a counterpart in reality -- the diminution of debt held by the public. The Administration takes this idea and runs it into the ground.
> If Social Security has no real assets at the moment --
> if it is simply an entitlement program financed out
> of current revenues -- than what exactly does
> acturial solvency mean? That over a 75 year period
It means that for a given point in time, the benefits and payroll taxes provided for by law enable the Trust Fund to finance the totality of benefits plus maintain a small cushion (one year or something like that) for the next 75 years.
> the same amount of money will be given to the government
> in the guise of SS taxes as will be drawn out -- even
> though, when more comes in than is needed, it is spent
> elsewhere, and when less comes in that is needed, the
> expenditures come from elsewhere?
in effect, yes, though balance means that 'when less comes in' there are enough bonds in the Trust Fund to make up the difference, either due to their interest income, or to their outright liquidation.
> If the Social Security Fund was incapable of
> amassing any assets that were built up and then
> drawn down, I can't see why this wasn't always
> a pure fiction.
To me the non-fictional element is that so far the Trust Fund balance is the total present value of taxes paid in excess of costs. As such, it has a political significance as something to which beneficiaries are entitled. One of my fears about the Clinton plan is that by engaging in spurious accounting the credibility of the Fund will be compromised in the future, notwithstanding its box-o-bonds.
Cheers,
Max