Tags for this video have been changed from 'Young Turks, Senator, Shelby' to 'Young Turks, Senator, Richard Shelby' - edited by jonny

SS is a Ponzi setup, plain and simple. The government isn't "investing" the money into anything but the government and returning that to their tax investors. It requires a larger working population coming on board to subsidize the older holders. The only reason it hasn't blown up is we have had continual increases in population as well as a mostly growing economy. Throw in a major economic paradigm change where population isn't tripling every century or the economic growth doesn't increase exponentially and the problem hits you in the face. You either have to raise taxes, lower the value of the dollar, reduce distributions, or raise the age cap; there is no other solution. With the baby bloomers finally coming of age, the change of this system to something that doesn't completely implode has to happen sooner than later.

There is no "surplus" in SS. That surplus it in U.S. government bonds which tie their worth to the general perception of the health of the US economy. The surplus owns no real assets in other words. Your 401k invests in actual companies, the SS trust invests in the government. For there to be an actual "trust" like a 401k, then the totality of nation wide spending would have to remain consistent and taxes be the same.

"From an economic standpoint, the question of whether the trust fund is fact or fiction comes down to whether the trust fund contributes to national savings or not. If $1 added to the fund increases national savings by $1, the trust fund is real. If $1 added to the fund increases national savings by $0, the trust fund is not real. A substantial body of economic research argues that the trust funds have led to only a small to modest increase in national savings and that the bulk of the trust fund has been spent."

http://www.nber.org/papers/w10953
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=233130

The proof is in tax cuts and increased spending via the Bush/Obama spending packages and tax breaks. This has a net effect of the government spending more. If they are spending more then they are saving, it doesn't matter where, then there effectively is no actual trust via inflation tax. To put it more plainly, the government has spent in 2 years what ss has taken decades to accumulate...there is no savings really.