Jacob Sullum

Don't be embarrassed if you've fallen for this scam. So has The New York Times. Last week, it tried to set Perry straight by reporting that "economists of all stripes agree" Social Security won't "exhaust the money in the trust fund" until 2037.

But as the Times itself conceded last year, this trust fund is no more than "an accounting device" that represents how much the government owes itself -- or, in other words, how much must be extracted from taxpayers to cover all the surplus Social Security money Congress has squandered over the years. The surpluses themselves are long gone, replaced by Treasury bonds that can be redeemed only through higher taxes or further borrowing (which eventually translates into higher taxes).

"This trust fund is an elaborate illusion cooked up by government magicians," Perry observes in his 2010 book "Fed Up!" In "No Apology," Romney agrees, calling the trust fund a "fiction that's often used to obscure the extent of the crisis."

Social Security's benefits already have begun to exceed its annual revenue, meaning the program is contributing to the deficit instead of making it seem smaller. By the 2040s, payroll tax revenue is expected to cover only three-quarters of promised benefits.

All of the possible solutions ultimately involve raising taxes or cutting benefits. But in settling on a particular fix, it is helpful to understand the true nature of the system we are reforming.

Jacob Sullum is a senior editor at Reason magazine. To find out more about Jacob Sullum and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.


Jacob Sullum

Jacob Sullum is a senior editor at Reason magazine and a contributing columnist on Townhall.com.
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