Government

"But where is this cash today? Where it's not is lying around in a safe, or hiding under lawmakers' beds. Instead, extra cash for the Social Security Trust Fund is invested in special-issue bonds, and to a far lesser extent, certificates of indebtedness. By investing Social Security's excess cash into bonds, the federal government is able to generate interest income for the program. In 2016, $88.4 billion of the $957.5 billion collected by Social Security came from interest income on its asset reserves."

"As you can see, the average interest rate being earned on Social Security's asset reserves is 2.9%. You'll also notice that the maturity dates for these interest-bearing assets vary greatly. This is to ensure that the program remains somewhat nimble in its ability to purchase new special-issue bonds should interest rates rise. A seven-year low in the federal funds target rate between December 2008 and December 2015 is a big reason the average yield on Social Security's asset reserves has fallen pretty steadily over the past decade."

"What Americans need to understand is that it's extremely common for the federal government to fund itself by selling debt. At no point previously has the federal government failed to make an interest payment to the Social Security Trust, and at no point previously has the Trust not received full value when a special-issue bond matures. These are debt instruments that are fully backed by the federal government. Or to put this another way, Social Security's asset reserves haven't been raided, and the federal government is currently paying interest on its debt."