When I write on Social Security, I regularly have readers write and tell me the “real” problem with Social Security is that Congress has looted the Social Security trust fund and spent the money on other programs. I have as little respect for Congress as anyone and they are profligate spendthrifts, but this narrative is false.

Every year, the trustees who govern Social Security’s operations issue a Trustees’ Report. Included in that report is a cash flow statement going back to the inception of the program in 1937. It details the taxes paid into the plan, adds interest earned from the excess funds held by the system, and then subtracts the administrative costs and benefits paid.

In 69 of the 86 years since Social Security was created, the system has enjoyed a positive cash flow. This has resulted in the system building up a cushion over the years, which currently totals to about $2.7 trillion. So, where is that money?

[It’s tied up in bonds, the safest investment possible, but also the least dynamic. Read all of King’s essay, in which he correctly asserts that the issue isn’t a lack of assets, but the large demographic shift that has made meeting obligations nearly impossible in the long run on today’s rules. That’s even more true of Medicare. — Ed]