Actually, the recession has been over for a while now.
It had turned into a full-fledged depression some time back. Much like the United States in 1936, there were so many people who were not sophisticated enough to realize that further suppression of investment by what were then termed to be “the wealthy” was only to do even greater damage to themselves. As a consequence, the depression was at an even deeper level in 1938 than it was in 1933.
And at the depth of that depression, Social Security was introduced. The promise it offered, that individuals would be able to enjoy their “golden years” without the spectre of poverty, was to be funded by a tax that fell equally on the employer and employee. Only, it ends up that the employee pays ALL the freight on this tax, known as FICA, because it comes out of the amount the employer has set aside for the payment of wages to the individual. Social Security was always a tax program, and existed only to provide additional revenue to the Federal Treasury, as the serious payout from that supposedly “segregated” fund was much lower than the receipts. So naturally, the fund was “borrowed” and put into general revenue.
Except, it has never ever been on any repayment schedule.
And now, as a parallel, the “Patient Protection and Affordable Care Act” is established as a NEW taxation program, only, unlike Social Security, the payout will start much sooner, and the base of the taxable sources will be much more broad than merely wage income. And of course, this revenue will simply go into the general fund, without even a pretense of creating a “segregated” fund.
The playbook never changes. And it always ends the same way, with economic conditions so precarious that nations end up in a worldwide struggle that comes finally to a shooting war.
World War II was a dress rehersal for what is coming. The big players will, willingly or otherwise, include the United States, and very likely the rift between those countries that produce energy, and those who consume it.
Nothing, and nobody, shall be “too big to fail”.
Except, it has never ever been on any repayment schedule.
That is not the way SS works. SS is a pay as you go system, i.e., today's workers pay for the retirement benefits of today's retirees. Whe SS was generating a "surplus," i.e., revenue exceeded benefits paid, the additional revenue was deposited into the General Fund. Treasury issued a non-market, interest bearing T-Bill in the amount of the "surplus" and deposited it into the SSTF.
The SSTF currently contains $2.6 trillion, which is now being used to make up the shortfall between revenue and benefits. SS has been running in the red since 2012. The General Fund must redeem these T-bills and since 42 cents of every federal dollar spent is borrowed, we must borrow 42% of the money to redeem the SSTF T-Bills. The SSTF is included in our $16 trillion national debt and is held under "Intragovernmental Holdings." So the reality is that we owe that money, albeit to ourselves, but the SSTF still represents an unfunded liability.
SS is going broke because it is actuarily unsound, not because of the SSTF and what happened to the "surplus." In 1950 there were 16 workers for every retire; today it is 3.3; and by 2030 there will be just two. And benefits are not linked to revenue. In essence, SS is a Ponzi scheme. Current retirees are getting far more out of the system than what they put in. Future generations will not.