Assets of the OAS Trust Fund? or just Phony IOUs?

As always, click on image to enlarge.
People who claim that ‘there is no Trust Fund’ never explain how this works in practice. In reality the two Social Security Trust Funds have portfolios of securities with stated maturities and rates. As these become due each year they are rolled over into new securities in whole or in part. If the particular program is running a cash deficit as the DI (Disability Insurance) has been since 2006 some of those securities are redeemed for cash and the amount of new securities issued to compensate for interest accrued on the Trust Fund are reduced by exactly that amount. This cash transfer did not cause the sky to fall three years ago, in fact like a tree in the woods nobody except a few people at Treasury or SSA even knew it was happening. In the case of OAS it ran a cash surplus in 2008 with the effect that more securities were issued than retired as shown here. In less than ten years OAS like DI before it will have cash needs in excess of cash receipts from taxation and a small part of its accrued interest will be paid out by Treasury in cash rather than in Special Treasuries and this too will not cause the sky to fall, instead it will be just a normal transaction between the Treasury and SSA.

In the context of total transfers in and out of Treasury the day the OAS Trust Fund moves from what CBO calls Primary Surplus to Primary Deficit will barely be a ripple on the huge wave of money going back and forth. Only morons and people trying to fool you claim this event is meaningful. Now it is true that after ten or fifteen years that ripple that started in 2016 MIGHT start getting noticeable and the column on the right starts looking notably smaller than the one on the left which would then be an argument for putting Plan NW into place for 2028. But the notion that we should be panicked because a combined event projected for 2017 now projects for 2016 is just scare-mongering. Because no part of those T-Bills look phony to me.