Why do some people describe the “special issue” securities held by the trust funds as worthless IOUs? What is SSAs reaction to this criticism?
As stated above, money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary. Far from being “worthless IOUs,” the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government. Many options are being considered to restore long-range trust fund solvency. These options are being considered now, over 25 years in advance of the year the funds are likely to be exhausted. It is thus likel
Related Questions
- Why do some people describe the "special issue" securities held by the trust funds as worthless IOUs? What is SSAs reaction to this criticism?
- Can securities and managed funds held in the name of a third party be provided as security?
- Where are my Cash Funds and equity in securities held (stocks/shares)?
