Soon after Medicare started, the government was collecting billions. Congress saw a great opportunity and took it. They broke open all those lockboxes, took the cash, put it in the General Account, and replaced your money with government-issued I.O.U.s. The government is good for it, right? Anyway, what’s the difference?
There are two huge differences. First, hard cash can be invested and grow: I.O.U.s cannot and do not. Second, your Medicare savings were supposed to be spent on your personal medical expenses. In the General Account, Congress could spend that money on any pork project, for political payback, or whatever crony capitalism scheme they liked. In short, the money Medicare needs to pay for your care isn’t there, by Congressional action.