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February 23, 2005

Rep. Sabo's Trust Fund Math

U.S. Rep. Martin Sabo (D-MN) announced this week that he will introduce a bill in Congress that he says will "guarantee Social Security solvency through 2080" by increasing the interest rate on Treasury bonds in the Social Security trust fund.

Of course, Rep. Sabo appears to not understand that the Trust Fund is just an accounting device, and that the bonds are merely a reflection of what one hand of government owes the other. Paying ourselves more interest by fiat is just proof positive that the trust fund is meaningless.

If Rep. Sabo really believes in this bill -- why doesn't he just double or triple the interest rate and increase benefits for retired seniors? Better yet, why doesnt he quadruple the interest rate and use the extra money to pay off the federal debt? I mean, hey, its free money, right?

Posted by at February 23, 2005 6:11 PM | Print

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