Millions upon millions upon millions of republicans love their SSI and Medicare Insurance as do democrats. So do I. These are free we paid for all of it ....yes even medicare is paid for every month as it is deducted for SSI checks. SSI and Medicare are earned.
Whereas corporate subsidies of all sorts are the real entitlements.
Former President Bush claimed the trust fund is just a bunch of government IOUs and therefore worthless. Is this true?
The trust fund does just contain IOUs, but they’re not worthless. If they are, someone should tell that to the very smart and very rich people, and the central banks of Japan, China, and many other countries that hold a large share of their assets in U.S. government bonds.
When the trust fund was created in 1935, the law stipulated that any excess revenues coming into the Social Security system must be used to purchase federal government bonds. (At the time, the stock market had just lost over 75% of its value and was understood to be unsafe.)
Federal bonds are absolutely safe; the government of the United States has never defaulted on any bond obligation.
Former President Bush appeared to be ready to break this tradition. He appeared to want the Treasury to “selectively default” on the bonds in the Social Security trust fund. He obviously felt the United States doesn’t have to meet its obligation to the working people of America the way it meets its obligations to ultra-wealthy bondholders. His suggestion that the U.S. government might not be willing to repay its debt obligations was remarkable and for a time completely disrupted global financial markets.
What will happen when the assets held in the trust fund are needed to help pay for benefits?
The trust will start selling the bonds. Currently it has to sell them back to the Treasury, although the law could easily be changed to allow sales to the same people, institutions, and governments who were buying U.S. bonds this past year.
