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[Clansgian AT wmconnect.com]

> I wonder if they are factoring in inflation and rising cost of living?  Or
> do they mean that the poor schmucks in 2079 will be living on 68% of what a
> recipient now receives?

While some dynamics are factored into the figures, they are ridiculously 
optimistic.  For the figures to hold true, there must be only very modest 
inflation with an extremely robust economic expansion during the whole 
period.  That 
has never happened yet in the history of our country.  

Also remember that in 2017 (or sooner, or much sooner) when the present 
payroll tax rate does not take in enough to pay the expenditures and the SS 
begins 
cashing in it's bonds that were purchased with the surplus up to that point, 
there are no material assests backing those bonds.  The only way the 
government 
can come up with the money is to raise taxes or borrow money.  Between now 
and then we will be going from 3.3 workers paying into the system for each 
person  drawing benefits to 2 workers paying into the system for each person 
drawing benefits.  And that's if we have tweleve years of rosy economy facing 
rising 
oil prices, a huge trade deficit, and a dollar declining against other 
currencies.

This last is quite important because the US has sold tresury instruments to 
other countries to the point that it is close to saturating the market.  
There 
is no "integrity of the US government" involved in it.  Just like everything 
else, the US's tresury instruments are worth exactly what people are willing 
to 
pay for them.  If the US enters yet another round of supporting its SS system 
by selling treasury bonds to other countries against a falling dollar, it 
would only take a few major holders of bonds to dump them on the market and 
they 
all become nearly worthless.

Politicians (and some economists) can do the dance and the dodge all they 
like, offer all sorts of alternate and creative proposals, or (like most 
people) 
wet themselves  while they desperately try to make themselves believe that 
they will always have the purchasing power that their SS check gets them now, 
-- 
but the central fact won't go away:  You can only have a certain small 
percent 
of any economic body using goods and services for which they do produce goods 
and services, and they can only do it for a short time each, and we have 
already gone past that point.  

There was a skit once where President Reagan was being interviewed:

"Mr President, can you explain your economic proposals."

"Yes, I can explain it very simply.  Picture the entire revenue of the US 
government as big blueberry pie.  You cut that pie in half.  Half of the pie 
goes 
to pay the military, half of the pie goes to pay for domestic programs, and 
half of the pie goes to social security."

"I'm afraid I don't understand, Mr. President."

"OK,  let me explain in simpler terms.  You take those halves of the pie and 
you put them into a big tub.  Picture the national debt as a gallon of milk 
and inflation as a bag of sugar.  You put the milk and sugar on the pie and 
you 
mix it all around ....."

"But, Mr President, that would just be a big mess."

"Ah .. OK, now you understand it."


James