Alan Greenspan, former chairman of the Federal Reserve, said a Social Security Trust Fund does not exist and that the U.S. is “way underestimating” the size of its national debt.
“The notion that we have a trust fund is nonsense – that trust fund has no meaning whatsoever except for the fact as an all private fund to benefit programs, if it runs out of money, you can only pay out in cash flows that come in but the probability that will happen is not particularly high,” Greenspan recently told the Fiscal Summit held by the Peter G. Peterson Foundation, PJ Media reported.
The trust fund that supports Social Security’s disability program is projected to run out of money late next year, triggering automatic benefit cuts, unless Congress acts.
Meanwhile, Greenspan also said the U.S. is “way underestimating” the national debt, which is currently more than $18 trillion.
“Largely because we are not including what I would call contingent liabilities, that is the issue of, which is answered by a question: what is the probability that in today’s environment JP Morgan would be allowed to default? The answer is zero or less,” he said. (my emphasis)
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