The Social Security Trust Fund now has accumulated roughly $1.8 trillion worth of US Treasury bonds. That total debt of the United States government is, if memory serves, just over $7 trillion. US Treasury bonds are owned by Americans, foreigners, individuals, pension funds, everybody under the sun. Most of the president’s personal wealth appears to be tied up in them. They’re universally considered to be the safest investment in the world. George W. Bush is the President of the United States. So the question is to him. Are the Treasury notes in the Social Security Trust Fund backed by the full faith and credit of the United States every bit as much as the bonds everyone else owns?
If the answer is “No. They’re worthless IOUs,” then the natural follow-up would be to ask what the impact of that news will be on financial markets in general, and, in particular, the ability of the United States government to continue to finance its large deficits at reasonable prices.