No trust for Social Security

December 21, 2010: 5:00 AM ET

The trust fund is nothing more than a trap and a fantasy for those who think it's a solid foundation for Social Security.

I used to joke about the government "solving" Social Security's long-term problems by creating Treasury IOUs out of thin air and sticking them in the program's trust fund. My point, of course, was to show that no matter how many Treasury securities there are in the trust fund -- currently, around $2.6 trillion -- the fund is merely an accounting fiction that has no economic value when it comes to protecting Social Security beneficiaries.

Now, with last week's passage of the much-ballyhooed tax deal between President Obama and Republican lawmakers, my sarcastic joke has become public policy. It all has to do with the provision cutting payroll taxes in 2011. More

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