Let's try this again: No, Social Security is NOT insolvent.

[Yo_Mama]

30. Yes, it's got a trust fund

But if you are 50 years old, the trust fund is not adequate to fund your retirement.

The DI trust fund is due to run out of funds by 2018; at that point, either money will be shifted from SS revenues to fund disability payments, or disability payments will be cut by somewhere around 20%.

If OASDI were a pension fund under private accounting rules, it wouldn't be considered solvent - the plan would be forced by the law governing private pensions to raise its contributions.

So I don't think your argument holds water. We need to raise revenues to save this program, and as DU discusses often enough, there's a way to do it. The fact that we aren't doing so, and that we are cutting FICA taxes as "stimulus", strongly hints that right now the political will to save SS/DI isn't there and that the real goal behind cutting FICA taxes on employees is to create a political base for not paying out benefits.

The second issue is that the assets in the SS, DI, Medicare, and federal retirement programs aren't marketable Treasuries. Instead they are special obligation Treasuries, on which the country pays interest by credit to itself. In other words, these are fake debt. We add them to our theoretical national debt, but no securities have been sold to the public.

While these programs were running surpluses that was fine, but now that they aren't, and we have to use the trust funds, that means we have to borrow and raise taxes. Well raising taxes is apparently out, so we are borrowing.

In fact, we are borrowing over a trillion dollars a year, and the borrowing rate is about static for the last two years and next year. At the beginning of January 2008, Debt Held By The Public was 5.1 trillion. It is now 10.4 trillion. We plan to borrow more than a trillion dollars next year.

If you count all the intragovernmental debt as debt, then we are already at a 100% Debt/GDP ratio. The only reason we can currently borrow money at very low rates is the financial tumult around the world, and the fact that we haven't turned those intragovernmental obligations into debt on the market. Under accounting rules, the "assets" in the intragovernmental debt bucket would not be carried at full value.

OASDI is not solvent in any sense, and those who are pretending it is are the enemies of the program. It can be made solvent; the only purpose of pretending that it is solvent is to forestall the steps needed to make it solvent.