Social and Behavioral Sciences Commons^™

Fiscal Crisis As Political Artifact: The Problem Of Misplaced Trust, Marc A. Eisner

New England Journal of Political Science

This article examines how early decisions regarding the financial model supporting Social Security—a dedicated payroll tax and a fully-funded reserve account—shaped the understanding of revenue flows and, ultimately, the debt. Although the original model was discarded, the residual features of the model had unintended consequences. The segregation of payroll taxes from the general fund and the distinction between the debt held by the public and the intragovernmental debt accentuated concerns over an imminent fiscal crisis and created pressure for austerity in discretionary spending. The projections of trust fund insolvency, in turn, framed a larger narrative about the entitlement crisis. To …