[Drammach]

I "think" I read that congress presently owes Social Security somewhere in the neighborhood of $7 to $10 TRILLION ...
I can't recall if that was present debt or projected..

[Glenn]

present debt

That's the one.

[javachip]

I believe the 7 to 10 trillion number is the total projected liabilities of Social Security.

The SSA claims the so-called trust fund had $1.5 trillion at the beginning of 2004. The trust fund is nothing more than IOUs from the Treasury, and there are no dedicated assets at either the Treasury or SSA backing those IOUs. So when SSA needs to cash them in, Treasure will either need to take the money out of revenues, or issue bonds to pay or default.

There are two important points in the current system's time-line. First is when Social Security payments exceed revenue, projected around 2018. Thats when SSA will start to cash the IOUs. The second critical point is somewhere around 2042 when SSA uses up all the IOUs. At that point, there is no obligation to bail out the system. Congress has two choices then, either do nothing and slash benefits or fund a massive expense out of general revenues, crowding out most other government programs.

See http://www.ssa.gov/qa.htm for more info, although they present the trust fund as if it's something with real value. Folks need to be educated. If they understood how badly the system was ripping them off, no one under the age of about 40 would ever vote for a politician who supports maintaining the status quo.