Finally, the media has come clean and told the truth about the Social Security and Medicare trust funds. On the day when the Trustees of both programs issued their annual report on the deteriorating financial health of each system, here is the key paragraph from the AP story:
“The trust funds – which exist in paper form in a filing cabinet in Parkersburg, W.Va. – are bonds that are backed by the government’s ‘full faith and credit’ but not by any actual assets. That money has been spent over the years to fund other parts of government. To redeem the trust fund bonds, the government would have to borrow in public debt markets or raise taxes.”
The photo is of the actual filing cabinet holding all those unbacked government bonds. It looks like each drawer has its own combination lock. Comforting, isn’t it?