I'm going to annoy a few of my fellow lefties and say that we should stop getting bent out of shape when people respond to the Trustees report by saying that Social Security is "going bankrupt" or "running dry" or some similar formulation. There's a hyperlegalistic sense in which this isn't accurate, but honestly, it would be a helluva dramatic event if the trust fund ran out of money and Social Security suddenly had to slash benefits by 25% in 2033 (see chart above). Referring to this as "bankruptcy" isn't all that big a rhetorical stretch, and everyone on both left and right should put away their fainting couches, ditch all the tired excuses, and get to work on a fix that would involve — say it in unison, folks! — a very modest and phased-in cut in benefits combined with a very modest and phased-in increase in taxes.(Emphasis supplied.) Actually it is more than a "rhetorical stretch." It's a lie. And not for "hyperlegalistic" reasons.
Yes, bankruptcy and insolvency are "helluva dramatic event[s]." But sovereign nations who control their own currency don't go bankrupt or insolvent in the way the phrase is used with regard to Social Security.
What is Social Security? It's a program whereby the federal government pays benefits to persons who qualify based on formulas established by the Congress and the relevant executive branch agencies.
How is it funded? Through a dedicated tax on wages.
How would Social Security become "insolvent" or go "bankrupt"? It can't in the true sense of the word. It can't in the governmental sense of the word either.
What Drum describes are choices for the government. Choices the government has with EVERY SINGLE PROGRAM it runs. Oh, by the way, that includes the military. It includes Medicare. It includes funding for student loans for colleges. It includes enforcing the environmental laws.
It is as much a lie to say Social Security is "going bankrupt" or "insolvent" as it is to say the military is going bankrupt.
It treats government finances like household finances. It is stupid for anyone who claims to favor progressive approaches to government to accept this frame. Worse, it is accepting lies.
If the federal government does not want to slash Social Security benefits in 2033, assuming the Trust Fund runs out, then it does not have to. It can add funding from other sources. It can raise taxes. It can cut military spending. It can do any number of things.
The ability of the federal government to not cut Social Security benefits is obvious to anyone. Any insinuation to the contrary is a lie. And a malicious lie in my view.
Now, if Social Security is to be treated as a traditional pension fund, well then, let's be honest about THAT. But then let's also be honest about the deficits that tax cuts for the rich and military spending have caused. But no one talks about "bankruptcy" and "insolvency" when tax cuts and military spending are discussed. EVER.