Max on Krugman

[Max Sawicky]

The Trust Fund does fund SS.  It's not a fund
in the normal sense (i.e., it has no funds),
but that's because the U.S. Gov is not a normal
funder.  Since the Gov, broadly speaking, 
'prints' money, can collect it thru taxes,
and uses it to pay assorted obligations, it can
be misleading to liken the Gov to a private-sector
financial institution with talk about unfunded
liabilities, 'government saving,' etc.  Strictly
speaking, the Gov cannot 'save' dollars because
the Gov declares the existence of dollars.  It
has an infinite amount of dollars, and it has
none.  What gives a dollar value is what is
available for purchase with it (both public
and private goods).

As you suggest, in a real sense any Gov pension
program is pay as you go, regardless of what's in
the fundless fund.  The Gov is transferring
purchasing power from taxpayers and/or
lenders to SS beneficiaries.

The columnists are speaking to the Trust Fund
solvency because their solution to the shortfall is
constraining purchasing power in zero-sum fashion.
Any addition to trust fund balances and benefits
must be offset by tax increases and benefit cuts.

Aside from this buried implication of the column,
I agree with the rest of it.

mbs

No, don't worry, Max, it's not that comparative advantage junk again.  I
just wondered if you'd comment on this column that PK wrote on social
security.  . . .