You can’t play Three-Card Monte without a mark, a patsy, a sucker. Guess who’s playing the sucker in Greenspan’s shell game?
Since 1983, American workers have been paying more into Social Security than it has paid out in benefits, about $1.8 trillion more, so far. This year Americans will pay about 50 percent more in Social Security taxes than the government will pay out in benefits.
… On Greenspan’s recommendation, Social Security was converted from a pay-as-you-go system to one in which taxes are collected in advance. After Congress adopted the plan, Greenspan rose to become chairman of the Fed.
So what has happened to that $1.8 trillion? The advance payments have all been spent.
Congress did not lock away the Social Security surplus, as many Americans believe. Instead, it borrowed the surplus, replacing the cash with Treasury notes, and spent the loan proceeds paying the ordinary expenses of running the federal government.
Only twice, in 1999 and 2000, has Congress balanced the federal budget without borrowing from the surplus.
Thanks to PhillyFilly for alerting me to this story (link).