A Crisis in 2018?
Privatizers claim that as soon as Social Security needs to use some of the interest the trust is earning, the treasury just won't be able to come up with the money. Oddly, the Treasury has borrowed billions for every other reason; why not to pay back the Social Security it owes us?
But the clincher is this. Private accounts would divert between 1/3 and 1/2 of Social Security's payroll-tax income, normally used to pay retirees, and put into private accounts. This would stop the money now flowing into the trust so some interest would need to be withdrawn the first year this started, and more would be needed each year.
If withdrawing interest is a crisis, then private accounts will start the crisis immediately instead of in 2018, but no privatizer has ever said this. That's because — by their definition — withdrawing interest is not a crisis.
Bush Contradicts Bush in Debate on Social Security's Solvency Feb. 28, 2004, by Bloomberg What Bush didn't tell his audience was that if the forecast is correct, the US will have its worst economic performance since the Great Depression. He also didn't say that his own White House economists disagree with some of the basic assumptions of the chart, which was drawn up by the Social Security Administration.
Bankrupt in "2041"???
If nothing is done for the next 36 years, until the trust runs out, Social Security will still be able to pay 70–80% of promised benefits just from normal payroll taxes. Second, if you want to call that bankrupt then private accounts will go bankrupt in 2025. Of course, neither is true; the government will just borrow the money and/or raise taxes. It just needs several trillion more under private accounts.
How accurate is "2041"?
Not very accurate. The Congressional Budget Office estimates the trust won't run out till 2052, and the SSA makes a wide range of estimates with 2041 listed as most likely. But even some of the President's own OMB uses more optimistic economic forecasts.
