Social Security (as We Know It) Is Here to Stay What matters about the trust fund is that its existence expresses the fact that Social Security is a liability of the government. The assets in the trust fund are Treasury bonds. And bonds, of course, are claims on general revenues, including money from taxes on capital gains and corporate income as well as the payroll tax. When Treasury Secretary Paul O'Neill says the bonds in the Social Security trust fund are not "real economic assets," he is denying that the full faith and credit of the United States stands behind the financing of Social Security benefits � at least as long as the Social Security system holds bonds. This rhetoric is dangerous because it could undermine confidence in the Treasury's bonds. As a matter of economics, the bonds in the trust fund are indeed irrelevant. When revenues from Social Security taxes no longer cover the benefits being paid out � which will happen somewhere around 2015 � the government will presumably sell bonds to make up the difference. The effect on the national economy will be the same whether the bonds are drawn from a stash at the Social Security Administration or printed fresh. Turning Social Security into a matter of individual private accounts, by contrast, would tear up the contract that Americans who paid Social Security taxes thought they had with their government. A government that promised justice for all would suddenly leave many of its older people at the mercy of the state of the market on the day they retire � or of the prevailing interest rate on the day they receive their annuities. No change in American society in the last half-century has been so dramatic as the reduction of the proportion of the elderly who are poor, and most of this change is the benign shadow of Social Security. That's a lot to put at risk. http://www.nytimes.com/2001/08/28/opinion/28MAYE.html