It now is running per year a 1/trillion dollar plus deficit.

Right now today it is spending 25% of GDP and taking in around 18% of GDP in revenue. Rough figures.

Bush's Tax Cuts won't make up the difference.  And cuts won't either.   The big picture is we've created a government that our economy can't afford.

Add on the unfunded liabilities of Medicare, Medicaid and Social Security and there is no end in sight since the policy of borrowing, printing and spending has not worked to turn things around.

The government has two choices.  It can reform itself and choose to have the type of government it can afford.  Or it can attempt to borrow/print it's way out of the situation hoping that eventually the economy grows enough to make up the difference.

The latter has been the policy of this and the last few presidents and as Margaret Thatcher said 20 years ago..."Eventually you run out of other people's money".

In my humble opinion the rent is now due and if we continue the policy of expanding the currency, borrowing from others etc... it will lead to dramatic and catastrophic consequences for us collectively.

The only thing our largess allows us is more time.  We have more time to screw around than Greece, Spain or any other country but the forces of economics still apply and eventually we will feel the catastrophic affects of bad fiscal policy.

BTD is correct that Social Security can't really go bankrupt but our government can and it will if it doesn't reform all forms of federal spending.

Liberals and Conservatives have to come to the reality that we can't cut or tax our way out of this.

Real Tax reform, cuts to all forms of spending is the only way to fix this.

I would apply a simple rule for Washington to signify an actual solution.

I will concede that no government program can go broke but you have to admit that the Trust Fund is a scam and there is no money in it.  Agree?

Social Security is out of money the second it pays out more then it takes in.  Which is now.  You are correct that Social Security benefits are a choice that government can choose to make.  It can choose to only pay Social Security benefits if it wishes too.  But that is going to be kind of hard to do and all since it's also chosen to police the world, pay trillions more in Medicare and in addition it's debt and finance payments will continue to rise.

Social Security is now adding to the deficit.  The reality is there is not Trust Fund.   The 2033 date is fictional since the money in the trust fund is not real and is simply IOU's writeen by a government that is currently 15trillion dollars in debt.

If you are going to argue for sanity then please admit this reality as well.

You can't have it both ways.

Furthermore, despite the economic downturn, full benefits will be paid for the next twenty years.  So, there is time to address the projections and that does not mean that we need to cut the benefits by 25 per cent now or incrementally so that we can avoid cutting them by 25 per cent 20 years from now.  

The reasons given for the "crisis" relate to the economy, lower taxable wages, adjusted for increased fuel costs--essentially  a further decline for middle income workers. Drum gives a little attention to the lower interest earnings for the Trust Funds since the Fed is holding the interest rates at a very low level. Perhaps, this will change before 20 years are up.

Moral of the story: We need to get our economy out of a ditch, and the sooner the better. But you already knew that.

Jumpstarting the economy would fix a lot of our problems.  But that has been entirely dismissed from the political conversation as an option.

And in a perfect world this might be true but it is not going to happen:

both left and right should put away their fainting couches, ditch all the tired excuses, and get to work on a fix

Why?  Because allowing them to do so would remove so many of the reasons why the government "has no choice" but to cut and slash and reduce and moderate the benefits/spending side of the equation for the old, the poor and the sick, and increase the burden on those same people.  In other words, what is really looming is the possibility that those at the upper income levels are going to have to loosen their death grip on their cash, and - speaking of fainting couches - some of those tax dollars could go to assist those at the bottom end of the income spectrum.

This is, as we all know, heresy - the stuff of stake-burning.

No, the truth of the matter is that there will be no suffering by the 1% if the circumstances of the other 99% get a boost from the government; in the long run, the !% benefit because of the money the 99% are able to put into the economy.  The more you take away from those who have little, the less they have to support the small businesses, the large businesses, the giant corporations who ultimately need all of us to be spending our money.

What the Tim Geithners and Kevin Drums and Paul Ryans and President Obamas (because he's got kind of a hard-on for deficit reduction and entitlement "reform") are practicing is the law of diminishing returns; the kinds of things they want to cut will only have them coming back for more - from those who simply won't have it to give - when things don't work out as they keep telling us they will.

This country pretty much has an unlimited ability to make conscious and deliberate fiscal and monetary decisions about its role in the quality of the lives of its citizens; it can choose to create the conditions that raise the tide and lift all boats, or it can perpetuate the idea that the sea level is static, and the only way to keep the boats up is to keep throwing people overboard, where they will sink or swim or tread water until they drown.  

An option not usually open to "bankrupt" entities is to simply obtain more revenue. That option is open to the federal government, via very well known means.

Go to where the money is.

But Obama et al do not want that. They want a fiscal emergency to allow them to take on SocSec, Medicare and Medicaid, to make cuts or changes which result in cuts.

Obama wants to achieve what Reagan could not --or would not-- do, which is to mess over the great social safety net programs. He made it clear before he even declared for the Dem presidential primary and caused Krugman's hair to catch on fire.  Krugman warned Democrats, but, alas, not enough of them listened.

First, there is no such thing as "solving" a 2033 problem in 2012. That is complete nonsense. We can build roads and bridges, but we are unable to forecast economic conditions even for 2013. Drum proposal doesn't pass the laughing test.

Second, today's SS benefit are way too low for a decent society. They should be raised not cut. Most people have no savings and meager, if any, pension funds.

Third, every commentator is afraid of taxes, so Drum suggest cutting benefits. Why?

It's no longer excusable, it amounts to intellectual honesty.

"We" know what "should" be done. And WE elected a President to get that message out to the vast electorate. But, our President took that mandate and threw it in the garbage. And, the message he sent out was one of a "Grand Bargain."

The Republican Candidate for President is running on a platform that all our economic problems are due to the greed of our poor and working class. "Shared sacrifice" only includes those two groups. As our President's hand picked Treasury Secretary stated,The Oligarchs are not to be nicked for as much as "one penny."

I agree with that to some degree. The battle over what we call it is a side track that is used by both sides when convenient.  The conservatives are currently using it to their advantage, but I forsee liberals using alternative framings which make SS seem indistinguishable from any other federal obligation, when in many way it is.  It's different.

The real issue is that there is a funding shortfall and how do we deal with it.

I also think that from a practical perspective, Drum is absolutely correct on the remedy. We will likely have to curtail entitlements (possibly only for people who aren't even adults yet and in the least damaging way possible) and increase taxes in some way.

Those on both sides drawing a line in the sand and demanding concessions from the other side while no concessions on their sides are the problem and the primary reason that nothing can get done.

The SS system as we know it will likely change because demographics and deficit constraints will force it to change.  The best way to change it in a way that protects the people who need protecting is to take the lead instead of waiting for the inevitable.

Is that going to help? Really?

What is needed is productivity and profit. Real profit from lowering costs while increasing output.

One other thing. No one is as careful spending other people's money as they are when it comes to spending their own.