Trust fund

Folks may recall the President hinting that the treasury bills in the Social Security Trust Fund are worthless.

"A lot of people in America think there is a trust that we take your money in payroll taxes and then we hold it for you and then when you retire, we give it back to you," Bush said in a speech at the University of West Virginia at Parkersburg.

"But that's not the way it works," Bush said. "There is no trust 'fund' just IOUs that I saw firsthand," Bush said.
...
"Imagine," Bush said in his speech. "The retirement security for future generations is sitting in a filing cabinet. It's time to strengthen and modernize Social Security for future generations with growing assets that you can control that you call your own assets that the government can't take away."

[Emphasis mine.]

Setting aside that this statement is arguably a violation of the Fourteenth Amendment, in a recent speech the President seems to have changed his mind pretty abruptly about the usefulness and security of Treasury bills as an investment vehicle.

In a reformed Social System, voluntary personal retirement accounts would offer workers a number of investment options that are simple and easy to understand. I know some Americans have reservations about investing in the stock market, so I propose that one investment option consist entirely of treasury bonds, which are backed by the full faith and credit of the United States government.

[Emphasis mine again.]

Which is it, Mr. President?

By the way, I found that latter quote by way of DeLong, who explains why, with the interest clawback built into the administration's proposed system, a person who does this will lose money --- not just in real inflation-adjusted dollars, but in face value!

If you don't understand the clawback system in the President's proposal --- and you're not alone --- I have an explanation of the Bush plan from Big Media Matt.