It would help a bunch if all candidates for public office, especially those Republicans who think government is "just like any other business" were required to take introductory college Economics 101. There is a major problem with the unquestioned belief in money as something tangible, fixed, and as a real substance: a Pot o' Gold, a Scrooge McDuck Money Bin, or what we will be discussing today, the Social Security Trust Fund.
None of these things exist in the magical ways that we are led to believe, first as children and then by the pronouncements of leading politicians. The question is: Whether it's the money in your wallet or the billions in the SS Trust Fund, what are savings? Time for some non-magical thinking below the fold.
A few simple observations.
MONEY: Money is a physical object such as a coin or bill or a written, digital or other record that is accepted as payment for goods and services and for settlement of debts by general agreement of the members of a society and economy. The main functions of money are: a medium of exchange; a unit of account; and a store of value. Any kind of object or secure verifiable record that fulfills these functions can be considered money.
Most of the money in use today, is without intrinsic value as a physical commodity. It derives its value by being legal tender, socially accepted as a form of payment, and as a claim on future economic goods and services. The money supply consists of currency, bank money in the form of computerized records, and other instruments, such as bonds that are readily convertible.
The enthusiasms of "hard money" gold fanatics aside, there is no Pot o' Gold. Money is a social abstraction of economic value. The value of money is entirely dependent on the real things for which it can be exchanged. If a society has an abundance of goods and services, its money has value. If a society is poor in real things, all the money it may create will not make it rich.
SAVINGS: One of the important functions of money is as a store of value, a claim on future economic production. Money that one puts in the bank or under a mattress can be used in the future to buy future economic goods and services.
ECONOMIC SURPLUS: This is the stuff produced or potentially producible by an economy that is beyond the immediate needs of those doing the producing.
SOCIAL SECURITY & WHY THERE IS NO POT O' GOLD: They've been lying to us and why a simple idea is all we need to know. In order for a person to retire, to stop producing goods and services and live on the goods and services produced by those who are still working, they must be living on the available economic surplus. No matter how we slice the pie, providing economic support to older people, children, and the disabled must come out of TODAY'S surplus. In order for that to happen there must be a transfer of value on a short term basis. We can't create more stuff by just creating more money. It is magical thinking to believe there is a pile of gold in a trust fund somewhere that if only we could catch the leprechaun we all will be rich. The truth is, taking care of those unable to work requires a transfer of stuff from the available surplus. If we accept that using our economic surplus to support those unable to work is a good thing to do, the only question is: WHAT IS THE FAIREST WAY TO TAX THOSE THAT PRODUCE AND OWN THE SURPLUS.
Unfortunately, there are those who reject the idea that there is a social obligation. They have created the myth of the empty "Trust Fund" while ginning up fear among the most vulnerable in order to pretend that the worship of money substitutes for the sharing necessary to support our elderly citizens.