Social Security’s Role in Stabilizing the U.S. Dollar and a Debt-Based Economy

Introduction The United States operates a debt-based economic system in which government debt (U.S. Treasury securities) underpins the financial markets and the U.S. dollar’s global standing. Within this system, the Social Security program – funded by payroll taxes and running large trust funds invested in Treasuries – plays a pivotal but often misunderstood role. Far from being merely an “expense” or “entitlement” to cut, Social Security supports monetary and fiscal stability through multiple channels: it is a major holder of federal debt, its inflows and outflows create steady liquidity cycles, and its benefit payments sustain consumer demand. This article provides a comprehensive analysis of how Social Security contributes to the stability of the U.S. dollar and economy, and how misguided policy or rhetoric about the program’s finances could undermine that stability. We will examine: Trust Funds as Treasury Investors: How the Social Security Trust Funds purchase and hold U....