I know a few things. Social security itself, that is, the system that makes payments to retirees and the disabled is actually in pretty good shape. There's no need to do anything for about 40 years in that regard. During the Reagan Administration the system was approaching financial straits, but Reagan capitulated and there was a tax hike that pretty well saved that part of the system. There was a deal with the Devil in the details: Social security taxes were capped for incomes somewhere in the 100's of thousands.
When people talk about a crisis in social security funding what they are usually doing is conflating the financial difficulties of Medicaid and Medicare with social security.
I have seen it reported by William Greider that Obama favors lifting the caps on social security taxes for the wealthy, and I think that would be a Good Thing.
What would be a Bad Thing would be to introduce any form of privatization for the social security system. The most benign form of privatization would be to invest a small percentage of social security taxes in securities, probably some kind of index fund, in the hopes of supplementing income for the system. I believe Clinton supported something along those lines at one point. The trouble with the idea is that it is a stalking horse for eliminating the system altogether, i.e. eliminating taxes for social security altogether. People don't need these kinds of accounts through social security. They can already do it for themselves easily through 401(k)s, IRAs and the like. In Good Times, one can see the appeal. In These Times, not so much. I have a tough time believing Obama will touch social security after seeing what happened to Bush when he hopped on that bandwagon, and especially given the current condition of most people's 401(k).
The quote below from a news story on Huffington Post below implies stuff I didn't know about.
"On Tuesday night, an address to a joint session of Congress will focus on the shared sacrifices needed to tame a national debt that is nearing $11 trillion, counting the $4.3 trillion in borrowed funds from Social Security. And on Thursday, Mr. Obama will unveil a budget blueprint that tips his hand on long-term tax, entitlement, energy and health-care policies.
I didn't know there was a dedicated social security fund. I thought social security funding came out of general revenues inasmuch as social security taxes (I thought) go into general revenue. I thought, well, maybe "funds borrowed from Social Security" is just a way of referring to the aggregate of monies collected through social security taxes--but then it wouldn't make sense to speak of "borrowed funds" from Social Security unless there is a dedicated social security fund.
I don't like that They have been "borrowing" from the Social Security fund and giving ammo for those who are crying wolf about the dire straits of Social Security. Why aren't thse things clearer? (Or, why am I so ignorant?)
Full disclosure: I received my first social security check this month.
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