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Originally Posted by Evil_inKarlate
Without splitting hairs, yes, you are correct.
"Vaccuum" in this case is looking at SS only and/or the 'Trust Fund' only. It has a balance of $X on paper, and will draw down that balance from year Y to year Z, at which point it will officially be broke and need outside assistance. This seems to be your preferred context and everything you've said regarding this context is 100% correct, IMO.
The "in context" in this case basically accounts for the outside circumstances of the rise and fall of the 'trust fund', including redemption of the 'trust fund bonds', and their impacts and indirect effects.
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As I noted above, an obligation of the US-taxpayer is an obligation of the US-taxpayer. These obligations (SS obligations and national debt) are both on the books right now. Using SS Trust fund assets to finance fiscal revenue deficits through the issuing of t-bills doesn't change any of the essential math here.
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Originally Posted by Evil_inKarlate
The US is not Germany, just as the US is certainly not France or the UK. To get to the circumstances you describe, we would need significant tax increases and a corresponding decrease in lifestyle. Americans already think our taxes are much too high, and seem to think the sky is falling if unemployment passes 7-8%; the reaction, and thus impacts, of a change like you describe could be severe.
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That is a 'political' problem that is separate from the core issue of boomer retirements. In this thread, I've only been concerned with pointing out how and why the boom retirement crisis is not as catastrophic as some would like to make it out to be. It is a realistically manageable problem. Challenging and difficult certainly, but manageable.
According to my understanding of the fiscal impact of the 'boomer retirement' wave is that Japan, Germany and Italy are the ones facing the biggest crisis with far bigger boomer retirement impact than anything US is projected to have. According to demographic studies I've seen, Canada and the USA are the two countries that are best equipped to handle the impact and the two countries who will have the least severe boomer retirement impact (mostly due to relatively high immigration levels of working age people to offset the natural boomer skewed age-ratios).
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Originally Posted by Evil_inKarlate
Tho thank you for the comparative info - It hasn't changed my position, but certainly softened it, and also reduced my personal level of concern.)
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Glad to hear it.
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Originally Posted by Evil_inKarlate
Actually, there is a difference. If the US funds $10B worth of $100B deficit spending from a SS slush fund tax increase rather than T-Bills, I agree it's a wash because somewhere down the line, we'll theoretically have to collect $100B in taxes to pay back the debt regardless of whatever internal accounting may or may not be involved. But if politicians see that they can potentially use $10B of slush fund money to buy votes without increasing the official $100B deficit, and then do so, then our future obligation is $110B. Unfortunately, experience has shown the latter to be the more likely scenario.
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As time goes on and the crunch numbers and dates loom ever closer, I think you will see the political will there to deal with the issue. Ten years ago it was politically easy to do what you say. Ten years from now, it will likely be politically impossible to do so.
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Originally Posted by Evil_inKarlate
I'd say the problem is more one of greed and entitlement attitude - US government services and obligations have been allowed to grow to far beyond what US taxes can support. Tomayto, tomahto.
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That's politics.
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Originally Posted by Evil_inKarlate
So I guess my implications of doom, gloom, and financial collapse are probably blown out of proportion, but we're still on the brink of a period of declining lifestyles (or hopefully just declining improvement of lifestyles). The sooner and deeper we can cut spending and/or reduce debt, the better off we'll be.
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You are correct that we are probably on the brink of a period of declining lifestyles, though I think there are other reasons for this (peak oil being the key one). And the boomer retirement wave will be one of the facts that may perhaps have that effect by forcing a higher level of general taxation - everywhere. Every western nation has the same demographic 'boomer bulge' beginning to move into their retirement years.
And as I've mentioned in previous posts in this thread, nothing I've said here applies to the issue of Medicare and/or healthcare. This thread has been entirely about Social Security. Medicare and healthcare is a whole different topic and, with respect to the USA specifically, that where the real long term funding problems lie.