Due to the age distribution of the American work force, the ratio of active workers to Social Security recipients is declining. Consequently, benefits are catching up with taxes and will overtake them in about the year 2012. From that point forward (until some distant day when demographic waves generate a surplus again), the government will use other tax revenues to supplement Social Security taxes and keep benefit payments flowing. To account for this Social Security use of non-Social Security funds, it will cancel IOU's in the trust fund.

Sometime in the early 2030's, there will be no IOU's left. To hear Mr. Clinton (and others) tell it, Social Security will then be "bankrupt" and a great crisis will ensue. The truth is slightly different. Instead of subsidizing Social Security with general revenues, the government will then have to - subsidize Social Security with general revenues. The illusory nature of the trust fund works both ways: Just as its assets do no good, its lack of assets does no harm.