To my interlocutors:
Let us be grownups. What is social security? There are ss taxes, and ss expenditures. For all practical matter, they have nothing to do with each other. SS taxes go into the treasury and are spent how Congress wants to spend the money. For years, ss taxes exceeded ss expenditures, so Congress could happily spend the surpluses on unrelated expenditures, while going through the fiction that the surplus created an asset/debt between the SSA and the US Treasury.
At some point in time, if we continue on our present path, ss expenditures will exceed ss taxes. At this point, general tax revenues are supposed to start paying ss expenditures (i.e. pay those T-bills the SSA is supposedly holding). This, tautologically, means that the Congress will have to reduce or eliminate non-ss expenditures that would have been funded in the absence of the ss obligation, unless Congress is willing to raise non-ss taxes.
I do not know how Congress is going to act at this point. Maybe there will be no reaction -- people will nonchalantly accept tax increases or budget cuts in other areas. It is possible, But one possibility, if not probability, is that Congress will choose to "reformulate" the calculation of ss expenditures to reduce the ss expenditures. This reformulation will be the functional equivalent of defaulting on all of those T-bills the SSA is supposedly holding -- if the T-bills were paid, there would be no need for reformulation.
I am all for "insurance against poverty," whatever that means. I don't believe that is what social security as presently constituted is. It is simply a scheme to increase present government revenues to pay for present government expenditures. When it stops being a net contributor to revenues, the Congress is going to do something relatively dramatic. Only time will tell.
David Shemano