Alan Simpson: “Not only the fiction of it, but since 1938, by law, the trust fund…”

On the recordApril 18, 1996

Not only the fiction of it, but since 1938, by law, the trust fund buys T bills which are IOU's that the Government must pay back. FDR did that, and that is what it is. There is no mystery to it. It is a series of IOU's, and when those are outstanding and then the revenue from Social Security will not cover-- it is a pay-as-you-go, do not forget, Social Security is pay-as-you-go, and if it does not cover, you have to cash in the IOU's and you have to get more money through the payroll tax, or reducing benefits or issuing some new kinds of securities.

Said by

Alan Simpson

Wyoming

Source

govinfo.gov

Editor's note · Context

Discussing the mechanics of the Social Security trust fund and its financial implications.

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Alan Simpson: “Not only the fiction of it, but since 1938, by law, the trust fund buys T bills which are IOU's that the Government must…”

Editor's note · Context