If I was preparing an audited financial statement for this government.....there would definately be a "going concern" note included in the report. The 'trust funds' are NOT actuarially sound, (in fact, they're non-existant) and absent substantial benefit cuts, or substantial tax increases, there is no way to make them actuarially sound. The ability of our government to continue on this path is based on a whimsical belief of the masses, trust, blind-faith, not sound economics.
The only thing separating this government from bankruptcy is the ability to print more money and to increase the debt ceiling. The ability to make future payments on entitlements is only guaranteed by future ability to tax the masses. There is nothing in the trust fund to put into the private sector to 'fund' future liabilities. How are you going to privatize the systems when the net present value of the unfunded liability (the amount that we would have to invest TODAY to make the SS and Medicare/caid systems actuarially sound) exceeds the net worth of the country? SMOKE AND MIRRORS are propping up this government.
The money previously withheld from employees and employers has been spent. It's gone. The current surplus is funding current, non-social security and medicare spending. Nothing is going into a 'lockbox.' I note with no small measure of disgust that if a private annuity salesman had done what the feds have done, he/she would be in jail for theft, fraud.
Privatization is a pipe dream because NO ONE has the cahones to stand up and tell the American people the truth: There's no money. We spent it. Sorry. You're on your own for retirement security and healthcare. That's the unvarnished truth.
When the day comes that the truth is revealed, there will be an uprising like you wouldn't believe. God save the USA.
In a nutshell this is what it is all about. In fact the entire worlds financial stability is build around those 2 words. A US Gov't bond is nothing but a piece of paper which is as I believe the saying goes backed by "the full faith and security" of the United States Government. Once that faith is lost the bonds will not sell unless interest rates rises to usurious levels and that in and of itself exacerbates the implosion by causing an ever rising rate level It is all smoke and mirrors but as long as we and the rest of the world keep jerkin' each other off it isn't a problem. Watch out though if one nation decides to let go of another ones crank.