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--have totally missed the point of a pretty good working paper, and that's the shame.

I agree. I always laugh when panic-mongers conflate external debt with unfunded liabilities. External debt may require tax hikes which could reduce national or household wealth.

I'd like someone to explain how taxing a 25 year old to pay the Social Security of a 65 year old reduces total national wealth. If Social Security is canceled tomorrow does that somehow boost national wealth?

That's not the problem. the problem is that we're seeing a growing percentage of "65 year olds" and a declining numbers of "25 year olds" whose wage taxes pay for the relatively swelling number of oldsters.

Studies by Kotilkoff and others have clearly shown that this cannot continue or well soon (within about this next generation) run out of having enough workers with income to pay the freight. Keep in mind there is declining employment in many industries overall and in many instances wage levels decline also. But regardless, one wage earner is not going to be able to pay for the entitlements of 2, 3, 4, etc. of the oldsters.

And we're getting very close to that tipping point. Also see my comments in #157 about the best solution from a tax system standpoint.