It's not in crisis or even in serious trouble. Even if we do nothing and the trustees' very conservative estimates of economic growth are correct, retirees 50 years from now will still receive more money than retirees do today - in real terms! Why do we want to mess with that by putting a bunch of junk on the table?

"It should be noted that this model is subject to further development. Future improvements and refinements are expected to be more likely to expand rather than reduce the indicated range of uncertainty."

This section only showed up in the 2004 Report and seemed then and now to be written in a deliberate opague way. Maybe I am just stupid but this sentence seems to suggest that if you simply assume Intermediate cost than random variation will not deliver Low Cost results. Which may be true, but is kind of irrelevant to the question at hand.

"Each time-series equation is designed such that, in the absence of random variation, the value of the variable would equal the value assumed under the intermediate set of assumptions."
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Exhuastion of the Trust Fund does not mean that the program is defunded, FICA goes on as does taxation on some benefits. But that is not really the point. Every year from 1997 to 2004 the date of exhaustion got pushed back and the payroll gap shrank.
EPI Changes in Trustees Projections over That trend stalled in 2005 over changes in assumptions in future retirees labor hours, and reversed itself in 2006 by a reduction in assumed interest from 3.0% to 2.9% which threw the payroll gap up to 2.02%, but 2007 shows a strong continuation in the trend with the gap now down to 1.95% and depletion back out to 2041

It is an odd crisis which left addressed grows smaller and more distant in time.

I did a series of posts at my blog called Cost of Inactivity. That is if you take payroll gap as a proxy for the fix you can go back to 1997 and calculate the cost of not fixing it when you had the chance. Now in nine of those years it is a slam dunk, year to year the gap shrank and the netsult is the equivalent of a tax cut, that is that money left in your pocket. But even in years that the gap increases you can still calculate your personal Cost of Inactivity. Its an interesting exercise.

"It might sound like an awful long time from now to those who'll be dead, but I want to retire around then."

Why tax me extra? If you are 34 years or more away from retirement you have plenty of time to build assets to compensate for only getting a check 20% better in real terms than my mom gets today. Any adjustment in future benefits presents me with a clear loss for 18 years against the very small probability that the economy will perform down to Intermediate Cost. Because if there is someone out there that is arguing that 1.7% ultimate productivity is the best mid-range estimate going forward I am not seeing it.

Nothing is a proven plan.

This is really simple. Social Security's own numbers has it solvent until 2041 ... projecting ahead from the Bush Economy with essentially no income growth for people on incomes under $100,000 ... which means, no contributions growth from people on incomes under the $100,000 cap.

By contrast, even under the Clinton recovery, which was the second worst post-WWII economic recovery for income growth for the majority of Americans ... the trust fund surplus soared, because there was at least some income growth for people earning below the SS payroll tax cap.

All we have to do is restore balanced income growth between the top 5% of the population and the super-majority 80% of the population, and that "crisis" in 2040 starts heading out at faster than a year per year ... which is the definition of "receding over the horizon".

The real crisis is Medicare ... and that requires at the outset establishment of universal health care so that we can get a handle on cost shifting and start getting our rampant health care price inflation under control.

Without the lies and the "blame the boomers" crap, of course. But the rest of it -- organizing existing stakeholders, reassuring current beneficiaries, convincing people the current health care system is irreparably broken -- would seem tailor-made for the health care issue. And we wouldn't even have to lie.

Oh, and one more lesson: be in this for the long-term. The original SS deform article from the Cato Journal is 25 years old. One we didn't learn back in '93-'94.

The Trust Fund is simply a Reserve, it is not a Prepayment of anything. Social Security like most insurance is PayGo, it collects enough in Premiums to pay Benefits with a prudent Reserve.

In the case of the Trust Fund these reserves are held in the form of Special Treasuries which are interest earning instruments much like any other public or private bond you would buy, with different maturities and different rates. If you like you can check out the portfolio, here is the one for OASI (DI having its own).
Assets of the OASI Trust Fund. Opponents of Social Security can and do put forth convoluted explanations of why these are just 'Phony IOUs'. Well they are all bogus, those bonds are exactly as real as the dollars in your wallet and for the same reason, they are backed by the Full Faith and Credit of the United States.

But in the end it doesn't matter, no individual has any direct interest in the Trust Fund to start with, you only have the scheduled benefit, and that modifiable by future income. To understand this we need a little history lesson.

To be continued.