>A friend writes me:
> The problem is that after 2018 we start paying back the money in the trust fund, which means that the SS taxes are no longer a net positive in the budget. So, we’ll have to raise taxes, cut other spending or run even more massive deficits.
Wait wait wait.
Are you saying that even if we cut SS payments to ZERO, the SS taxes still wouldn’t cover the missing money!?
Ok, if we cut the social security benefits to zero, then the social security taxes would continue to be available to pay general revenue needs. My point was that after the trust fund peak (2018), we’re going to have to start reversing the flow, and that means shifting priorities from discretionary spending (health, education, infrastructure, defense) to social security. If you take a look at the heritage foundation paper linked yesterday, that option would result in the “big 3” (social security, medicare, medicaid) and interest taking up the whole federal budget, leaving nothing left over for all the traditional, explicitly constitutional functions.
Hope that answered the question. Note that cutting the benefits to zero would require a new act of congress and would be so politically unpopular that in two years, the old law would be reenacted by 535 brand new congressmen.