Social Security, A Compact Between Generations

I just read an article from Paul Krugman giving a strong counterpoint to the popular analysis saying social security is going bankrupt and must be scrapped, cut, slashed, reorganized, privatized, etc etc etc. I have been a fairly firm subscriber to this line of thinking as well, and I suspect that YOU have been, too?

Anyway, it's back to the realm of uncertain for me. I know some of the big facts about it, but there's much to be discovered. Here's the link to the article.

Here's part of my dialogue with the friend who showed it to me:

While this does provide an interesting and seemingly sound argument in defense of SS, I have heard statistics citing the fact that SS will begin paying out more than it gets in around 2016/2017. The whole aging population/changing demographics thing will start to hurt a bit. Of course, then we should be able to use the surplus to take care of those costs, until ~2037, when (I may be wrong) we can only pay about 80% of benefits.

What I don't know is what the truly long term situation is, say, in the 20-50 years beyond the 2037 threshold. If it won't be trending in the other direction (and how would that happen unless we start breeding like rabbits?) at that point, I don't see how changes are avoidable.

Another thing that is HIGHLY relevant to my opinion here is where the 2.5 Trillion in surplus is at right now. Borrowed like Pawlenty's "delayed school payments"? Highly relevant for me.

Cheers,

Drew

Cheers,

Drew