Social Security is not a ticking time bomb. Between now and 2085, its cost as a share of GDP will rise about 1.2%. That's why when you look at long-term budget projections from a place like the CBO, they look like this:
Social Security essentially levels off, it's not growing at some out-of-control rate. Rising health care costs are the real ticking time bomb in the U.S., not Social Security.
Given that the problem here is fairly marginal, there are some fairly easy fixes. We can either find some way to cut benefits (e.g. by raising the retirement age, reducing the cost of living adjustments, change the formula for calculating benefits from working years, etc) or raise revenues (e.g. uncap the payroll tax, raise it by 1-2% without uncapping it, etc.) or some combination thereof.
This isn't a crisis, it's just a problem in which doing the necessary tweaking is politically tough. Which is why historically (i.e. in the early 1980s and, perhaps, today) some commission has been convened to make the unpopular suggestion that was then implemented.
You can easily get rid of all future liabilities of the US government by a stroke of a pen, i.e. raising the age of retirement to 80. And I agree that medical liabilities are much worse.
However, those assumptions in that table assume that GDP grows at 4.7% per year. I have to believe that is a nominal figure because no economist in their right mind would assume that the US economy is going to grow at that level after inflation for 75 years. Such forecasting requires some pretty broad assumptions. For example, they assume inflation is stable. Well, maybe, but if you made that assumption in 1945 for the next 75 years, you would have been spectacularly wrong. They make implicit assumptions about demographics. Yet again, in the developed world, population growth has been dramatically slower than what people forecasted 50 years ago. I have little doubt that the productive capacity of the United States is still extremely robust, despite the financial crisis, but the topography of economic growth over the next several generations will almost certainly be different than what is being forecasted. In the 1980s, the Japanese thought they had would have no problems with paying out social security benefits in anyone's lifetimes. Today, total tax revenues in Japan covers interest payments on the debt and social security payments, and that's it.
The system is financially unsound because it is comprised of one asset that can be neither bought nor sold. There is no pension fund in the US that I know of that operates like SS. Such a fund would be illegal if it were run by a corporation. Every state in the union has a real pension fund for its government employees. The typical state pension fund has compounded at 6-7% over the long run compared to 3-4% for SS by investing in a broad array of asset classes, such as stocks, real estate, etc. That 3% differential is enormous when compounded over time. Yes, some state funds are bad, i.e. Illinois, but others are good, i.e. Florida. And you can get around many of the problems with state funds by directly depositing the money paid by social security taxes into the fund. Better yet, give people the choice of whether they want to keep their money in the trust or invest it themselves. You avoid a potential disaster/Japan scenario by getting as much of the liabilities of the United States off the government books. Why is that bad?
