My colleague Dan Mitchell, in a letter in today’s Los Angeles Times, points out the absurdity of calling Social Security “bankrupt”:
Those seeking radical restructuring of Social Security use the word “bankruptcy” to mean that the day will come when the program’s trust fund will be exhausted and its earmarked tax revenue will be insufficient to pay all entitlements. By that definition, the military is bankrupt today. We spend about $500 billion per year on the military, including veterans’ payments. Yet the Pentagon
has no earmarked tax revenue and no trust fund. If our indefinite entitlement to national defense were treated analogously to Social Security, the Pentagon’s “unfunded liability” would be on the order of $15 trillion to $20 trillion. Yet no calls for radical restructuring of the “bankrupt” military are heard.
Right. It’s silly to call one of the few programs with its own dedicated funding stream “bankrupt” if there’s a threat that the dedicated funding stream might be insufficient to pay its obligations, when most programs have no such funding stream at all.