To the editor:
Thanks to Dale Coberly for explaining the economics of Social Security so lucidly (letters, April 17).
Of course Coberly’s analysis assumes that the Trust Fund is not a “fraud,” as Gordon Shadle’s letter in the same issue argues.
Shadle’s letter draws an analogy to someone who borrows money from himself, spends it all, and replaces it with I.O.Me’s, “backed by the full faith and credit of himself.” According to Shadle, “He’s too stupid to understand that once money is spent it doesn’t come back.”
There are two problems with Shadle’s analysis. “Full faith and credit” is a concept applicable only to governments, not to individuals or even private organizations. And “once money is spent it doesn’t come back” isn’t always true.
If I deposit money in a bank, it does not put that money in a “lockbox” to secure it until I want it back. It loans the money to someone and that person spends it. But if that person has an income (and if he doesn’t, the bank won’t loan him money) he will pay back the loan. So “spent money” can indeed “come back.”
Government has a constant flow of tax revenues. So if it sells bonds to me, to a bank, or to
Because of money borrowed from the Social Security Trust Fund, our government has borrowed about 2.6 trillion dollars less from me, the Bank of American, and