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posted: 12/23/2012 5:00 AM

Social Security surplus is illusion

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Letter to the editor writer Bill Hartman offered up a suggestion on how best to save Medicare for future beneficiaries by emulating the funding mechanism used to support the Social Security Trust Fund.

Mr. Hartman states that Social Security has a surplus of over $2 trillion. That supposed surplus is in the form of Treasury bonds that have been issued to cover the monies that various Congresses have appropriated for general revenue uses to fund the federal government.

Treasuries are debt vehicles. They are issued to cover borrowing. They have to be repaid, with interest. The "surplus" Mr. Hartman implies available in the Social Security Trust Fund is a paper one. The Treasuries, plus interest, have to be repaid either from taxes or rolling over the debt to new Treasuries.

Given the status of our federal debt and deficits that "surplus" could vanish before our very eyes.

Steve Sarich


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