[Norseman]

I think you’d agree that changes in the non-public debt held by the social security trust fund is to an extent a measure of the health of the system.

When the balances are increasing, income to the trust fund is exceeding outgo. The more rapid the increase, the better the shape of the fund. Then, one day, the increase slows, indicating that outgo is starting to overwhelm income (tax receipts). Finally, the increase stops altogether, indicating that outgo equals tax receipts.

And finally, we reach the present state, where outgo exceeds income, the non-public debt has to be cashed in at the Treasury, and it’s only a matter of time before the Trust fund is depleted unless changes are made to restore the overall financial viability of the social security system by some combination of raising taxes and/or cutting benefits.

So, a large non-public balance in the trust fund is a good thing, but the more important measure is whether that balance is increasing or declining, and how fast.

At least that’s how I see it.

[kabar]

I guess you could look at that way, but the trust funds represent an unfunded liability. If they are growing, we are probably taxing the people too much (surpluses) and if they are declining, then we are not taxing them enough to support the program.

The reality is that even if the SS Trust Fund contained real assets, the program will still go bust in 2036, i.e., the SSTF will use up all of its "assets."

I attended a week long seminar on SS some time ago. We had all kinds of folks from GAO, CBO, OMB, Congressmen, think tanks, SS Trustees, and even a Nobel Prize winner in economics discuss their various proposals to fix or change the system. One interesting suggestion I heard from a long term SS Trustee (public member) was to make SS a line item in the federal budget and get rid of the SSTF. This would force Congress to address the real costs of the program, which they have for so long used as a cash cow. I agree with him. Let's get rid of these phony trust funds.