Imagine a parent who, faced with the duty to build a college fund for his child, writes himself IOUs instead of putting real money aside for the future.
That’s what Social Security has done, except that it calls its stash a “trust fund.”
Many people believe the trust fund contains securities that have real economic value. So, a few days ago, I wrote an editorial titled “The myth of the trust fund.” It wasn’t long before the piece drew an objection.
David Ekerdt, of Kansas City, Mo., director of the gerontology center and a sociology professor at the University of Kansas, asserted that I was badly mistaken, and he wrote a response. I had an amicable e-mail exchange with Professor Ekerdt prior to the publication of his article, but we weren’t able to resolve our differences. I should add that he is hardly alone in his views. Many subscribe to the trust fund myth.
AARP, to cite a better-known example, has actively spread the notion that Social Security’s financial footing is quite strong, perfectly healthy — nothing we need worry about right now — because the trust fund contains trillions in government bonds.