That's the question Megan McArdle raises in her Bloomberg column condemning efforts to raise Social Security benefits. McArdle tells readers:
"Now, I don't want to get mired in the tired old arguments about whether the trust fund is "real" -- whether it's a stupid accounting abstraction or a profound moral promise on the part of the U.S. government -- because this obscures the actual point we need to be concerned with: If we want to pay Social Security beneficiaries more money than we are collecting in payroll taxes, the money has to come from somewhere, and ultimately, that "somewhere" is the United States taxpayer. It is supremely irrelevant whether that money flows through the "trust fund" or Uncle Sam holds an annual ceremony in which the trustees are handed one of those giant checks they present to lottery winners; we still need to find the money to make good on that check."
Of course we would all like those who disagree with us in major debates to simply disregard their arguments and accept what we are saying as true. But most of us just don't possess the power to force our opponents to concede the truth of our position, even when if we use ad hominems to belittle their arguments.
In the case of the Social Security trust fund, the tired old argument stems from the legal structure of the program whereby it is financed exclusively by its designated tax, including the surpluses from taxes in prior years. McArdle tells us that bonds purchased with prior years' surpluses don't matter, the government still has to cough up the money in the current year. The same logic applies to the bonds held by rich people like Peter Peterson. The government has to cough up the money to pay him the interest this year on whatever bonds he holds.
If McArdle wants to declare it "supremely irrelevant" that the payments for Social Security come from bonds held by the trust fund, then with equal validity we can declare it supremely irrelevant that Peterson paid for the bonds he owns. After all, this would just get us into tired old arguments about moral obligations to bondholders.
McArdle could contend that we have to pay Peterson his interest because otherwise no one would ever buy U.S. government bonds again, but this point actually is directly in line with tired old arguments about moral obligations. The logic of this assertion is that if we don't meet obligations to past bondholders, then no one will trust us to meet our obligations to future bondholders.
Suppose people apply the same logic to the taxes they pay for Social Security benefits. If we don't follow the law and pay people the benefits they have earned, then they may be more likely to try to avoid paying Social Security taxes in the future. They certainly will be less likely to approve tax increases to fund the program, if they have no reason to believe that the taxes will actually be used for the program, as required under law.
But McArdle doesn't want to have this sort of discussion. Readers are just supposed to accept her pronouncements as true.