The Boston Globe's token conservative Jeff Jacoby explains the "assets" in the Social Security trust fund: "IOUs can't save Social Security."
But the trust fund’s assets are an illusion. Social Security doesn’t own $2.6 trillion in gold bars or real estate or shares of Google. All it has are Treasury IOUs. Those IOUs represent $2.6 trillion that the government has already spent and promises to spend again. But to spend it again - to redeem those IOUs - Congress will have to raise taxes, cut spending, or go deeper into debt. Which is exactly what Congress would have to do if the Social Security trust fund didn’t exist.As I've noted before, the Social Security surplus has served to hide the true federal deficit but the Baby Boomers are about to eat through the incoming revenues and a pile of Treasury bills which must be honored. Taxes, spending or more borrowing: pick your poison, America.