Trust Fund And Worthless IOUs
We have never made money arguing with the markets. The markets say that obligations of the US government are not worthless. In fact they are selling closer to historic highs rather than zero.
What we find interesting is that these same critics hold obligations of the US government in their own portfolios. In portfolios of these critics, US debt obligations can be "cash-equivalents' rather than "worthless IOUs".
We would agree with the statement that the Trust Fund hold assets that are "worth" "less" rather than worthless. As the government issues more debt, it dilutes the what little assets the government has to stand behind all of the debt. So overtime the holding of the Social Security Trust Fund will be worth less every day.
We acknowledge, and completely agree, that the Trust Fund is poorly invested. We acknowledge and completely agree that the Trust Fund is dwarfed by the obligations of the system. By any standard of insurance, Social Security is today insolvent, and has been since it took in its first payroll tax revenue. But that is not what is being said. What is at issue is the value of what is held in the Trust Fund.