» Posted by Martin Weil on January 17, 2007

Best I can tell, Social Security is in the best financial shape of any federal program. It is in far better future shape than Medicare. And it is in way better shape than the portion of the government that isn't financed by the payroll tax. That part of the government has a $434 billion deficit. Social Security, by contrast, has a $185b cash flow surplus.

So says economist Brad Setser in this post. Setser argues fairly convincingly that Social Security is not in the dire financial trouble painted by the Administration. Best point: "2018 is - by contrast - a date that could cause the rest of the government a bit of trouble. That is when the rest of the government has to stop borrowing from the Social Security system and -- shockingly -- start repaying the Social Security system."

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