W.C. Fields was on a long train ride one day and found himself sitting in the smoking car at the losing end of a few hands of poker. His chips had run out. His credit had reached the limit of trust his new found debtors were willing to extend. W.C. leaned back in the plush velvet parlor car chair and said, “I am going to do for you something I rarely do for a stranger. I am going to give you my IOU.”
In the case of Social Security the government takes your money, takes an equal amount from your employer and puts the sum of them both in a cookie jar called “The Trust Fund”. Then they take all the money out of the cookie and spend it on such things as they see fit. Some of it is paid out to those already in retirement, some of it goes to building needed highways, some of it goes for earmarks that buy votes for favored politicians or as barter for the passage of bills. None of it stays in the cookie jar.
But the powers that be, lean back in their plush leather chairs and tell us not to worry. They have given us their IOU. They tell you it’s in a Trust Fund and invested in safe government securities. Imagine for a moment that you are concerned about the financial stability of a bank that was holding the assets upon which you are relying for retirement. Now I ask this question. What would be your reaction be if the bank president wrote a letter to you – not to worry, the bank has used the money to expand its business but your account is safely protected by IOUs from the bank? That is Social Security.