CHARLESTON, W. Va.

Regarding Froma Harrop’s Oct. 21 column, “Social Security is every politician’s toy”: If anything comes out of the Great Recession it would be the economic truth surrounding the Social Security Trust Fund.

For years the board of trustees has reported surpluses within the system with current holdings stated at $2.5 trillion and projected to grow to $4 trillion.

But in the wake of the economic downturn lawmakers now say that an account deficit will require a cash infusion of about $10 billion for 2010 and $9 billion for 2011.

Furthermore, those monies will have to be financed by greater deficit spending as part of the annual budget process that already projects record high deficits.

How can that be?

The answer lies with the fact that the Social Security Trust Fund really doesn’t exist, as it has no fungible assets or marketable funds.

What it has are intergovernmental IOUs that serve as little more than bookkeeping entries marking when lawmakers raided the fund to help mitigate annual budget deficits.

Thus the reason why the trust-fund administrators now turn to lawmakers to borrow money — as opposed to draw down existing funds — to effectively bail out the system for the next two fiscal years.

As former Government Accountability Office chief David Walker famously said, “The trust fund has no financial significance. . . . If you did [accounting like] that in the private sector, you’d go to jail.”

As a result of this bipartisan, federal book-cooking scheme, we now have a preview of what the Treasury Department, which issued the IOUs, will have to do to honor long-term obligations, and that’s to enter an increasingly hostile international marketplace and borrow even more money.

This is happening years before actuarial projections had forecast and on top of the emergency borrowing to bail out Wall Street banks and financial institutions — AIG, Fannie Mae, Freddie Mac, GMAC, General Motors, Chrysler, etc.

Adding insult to injury are claims for easy fixes to Social Security that center on either increasing the eligibility age for payouts, eliminating the most regressive aspects of the system that exempts income earnings over $106,800 or simply increasing the tax.

The latter won’t happen as that would result in President Obama’s breaking his campaign pledge to not increase taxes on lower- and middle-income earners.

Delaying old-age benefits to Baby Boomers is unlikely as the economic and political climate that they live in now — millions of lost jobs, investment portfolios laid bare, and decreasing housing prices — is effectively why the trust fund is having to borrow money now to meet early obligations.

Eliminating the loopholes that exempt wealthy Americans’ income earnings could help but is politically unlikely. So, too, would be taxing investment income for the super-wealthy that under current law is completely exempt.

But even if that were the case, the need for the Treasury to have to enter the market to borrow money to honor the IOUs that our lawmakers left in place of actual funds will undermine the best reform efforts as market forces will illuminate the false economic foundations that the system was built upon.

Howard Swint lives in Charleston, W.Va.