Once again, the issue of social security adding to the deficit and calls to reduce or eliminate this "entitlement" are part of the national political discourse. So, once again I think it is important to understand the truth about how the system actually works.

The amounts you and all other working Americans had withheld from your pay during your working career were transferred into a Social Security trust fund. This trust fund was not part of the Federal budget. Amounts paid into the fund and paid out of the fund did not directly affect the federal budget, and up until 2018 the amounts collected by the fund exceeded the amounts paid out. In 2018 the fund balance was approximately 3 trillion dollars. Since 2018 the amounts paid have exceeded the collections. This is due to political parties on both sides refusing to deal with the long-term looming insolvency of the fund. They just kept kicking the can down the road.

So why, if this is a separate fund, do we constantly hear about the increase to the deficit caused by paying this so-called "entitlement". The answer is quite simple. The federal government has borrowed virtually all of the funds in the trust by issuing government bonds, and since 2018, instead of being able to borrow more money, they have been required to start paying back these loans. The payments of interest on the loans and any repayment of principal add to the federal deficit.

So, when we hear politicians saying that they want to cut these "entitlements" what they are really saying is that they want to quit paying back the money the government borrowed over the lifetime of the social security system. This is no different than defaulting on any of the other amounts borrowed by the federal government.