Traditionally, the majority of governmental financial information is maintained and reported in the “fund” financial statements. Each fund is a separate legal entity and each fund has a separate and distinct set of accounts to maintain transaction entries for each category of income and expense in that fund. Examples of funds range from the General Fund to various special funds such as the Transportation Department Fund, the Department of Health and Welfare Fund, the Homeland Security Fund or the Social Security Fund and 100’s of other funds for various government units or agencies.
The reference by politicians, political pundits and the media to the “SOCIAL SECURITY FUND” as a bank account or a bushel of money is clearly a mischaracterization of the term “fund.” It would be more accurately referred to as the “Social Security Entity or Social Security Unit.” But that just doesn’t roll off the tongue right. So let it suffice to say that the use of fund when referring to Social Security is not referring to a bank account but rather the accounting terminology for the recording of financial information of a Government Unit.
This isn’t saying that there is no money in the Social Security “unit” bank account because there probably is money going in and out of an account but there is no “savings” or “investments” being held to pay future SS benefits because all of the “money” was spent.
Today, September 21, 2011, Mitt Romney in a speech in Orlando Florida in an attack at Rick Perry’s suggestion that maybe the states should administer Social Security instead of the Federal Government he raised the question about how would the Federal Government go about transferring the Social Security Trust Funds to the States. MITT … there are no “funds” (money) to transfer. The mischaracterization of the term fund is misleading to the general public.
My point is, we need truth and we need complete understanding of what people are saying. The deliberate and suttle misuse of terms in order to persuade people to reach an erroneous conclusion is completely wrong. We need to be diligent in searching for the truth and understanding what the meaning behind the words truly is. We need to know why, where, when, how.
We wouldn’t be in the mess we are in now if we knew what “HOPE AND CHANGE” meant.