The illusion of investment is maintained by giving the Social Security trust fund government bonds in exchange for the money that is taken from it and spend on other government programs. But these bonds likewise represent no tangible assets. They are simply promises to pay money collected from future taxpayers. The country as a whole is not one dollar richer because these bonds were printed, so there is no analogy with private investments that create tangible wealth. If there were no such bonds, then future taxpayers would still have to make up the difference when future Social Security premiums are insufficient to pay pensions to future retirees. That is exactly the same as what will have to happen when there are bonds. Accounting procedures may make it seem that there is an investment when the Social Security system holds government bonds, but the economic reality is that neither the government nor anyone else can spend and save the same money.
