Improving Understanding of the Social Security OASDI Trust Fund

Brian Schmult

MPRA Paper from University Library of Munich, Germany

Abstract: This paper argues that the Social Security OASDI Trust Fund is widely misunderstood by the public, thereby corrupting the debate on how to handle future scheduled benefits, and increasing the risk of program changes that would not be accepted if people understood how the program functions. The Trust Fund is a fiscal nullity but appears to be regarded by many as essential, hence the public debate is about how to ``fix'' it, rather than about the moral question of {\it whether} to fund scheduled benefits, which are clearly affordable. This misunderstanding indicates the need for a shift in emphasis in public descriptions of the program. For this, this paper lays out a set of data, arguments and analogies that are asserted to be accurate representations of the OASDI program and Trust Fund operation, and which are proposed as tools for public education. Finally, this paper argues that an important step in shifting public debate is to re-institute full recourse to Treasury funding for any payroll tax shortfall, which will force the public debate back to benefit levels and revenue sources.

Keywords: Social Security; Trust Fund; OASDI (search for similar items in EconPapers)
JEL-codes: H55 H60 (search for similar items in EconPapers)
Date: 2012-12-24, Revised 2013-02-05
New Economics Papers: this item is included in nep-age
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:44227

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