Living Economics

Eat Your Cake Now - cartoon transcript
Who doesn't like to eat their cake and have it at the same time?

Kimberly : This cake looks really yummy. I love to eat it right now.

Dallas: But we can not. This is the anniversary cake for next week.

Eric: We too can eat this cake right now and still save it for next week.

Amy: That would be wonderful. How can we do that?

Eric: That is easy. It is called the ... "eat your cake and have it too" trick ... that the US Congress has perfected.

Joey: I don't understand. How does the US Congress pull off this trick ... ?

Eric: Well, Social Security collects payroll taxes, but spends less on benefits than it collects ... . It deposits the surplus into a so-called Trust Fund. The Trust Fund balance is then diverted to general spending leaving behind an ... IOU note ... in the Trust Fund.

Joey: OK. How can we apply the same trick to our yummy cake now?

Eric: Easy, we can ... eat the cake right now and leave a picture of the cake for next week.

Kimberly: Then what happens next week?

Eric: Well, we just have to buy another cake then.

Amy: Are you saying that the eye owe you note in the Social Security Trust Fund is just like a picture of our cake here?

Eric: Exactly. We will have to pay more taxes to redeem the IOU note in the future.

Joey: Who is in favor of eating the cake now?

Everybody in unison: We do.

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