What makes social security so special that the government can't just borrow money for that too?

Here, let me fix that.

Nothing, I guess, except that the amounts of bullshit are an order of magnitude larger.

All factual now!

That's what happens when you deliberately use SS funds to finance the government. It is a deliberate policy to move the tax burden downward onto the lower classes.

It's not clear to me that borrowing from the SS fund surplus is a bad thing, if we have to borrow (now, I do think we should do a LOT less borrowing). When the government borrows from SS, it does so by having the SS fund buy T-bills, which pay interest (although at a low rate). These are the same T-bills that we're up to the hock in with China, etc. If we stopped using the SS fund to buy T-bills, but continued the same level of deficit spending that we're doing, we'd just have to sell more T-bills to foreign countries. The only way that this becomes a re-distributive down to the lower classes is if we 'fix' social security by just straight up raising the rates but keeping the tax otherwise essentially the same.

It seems much more likely to me that if SS is fixed by raising taxes, that this would be done by either adding the SS tax to investment income or lifting the upper income cap to include higher income folks in the pool. Either option would be more politically feasible, I think, than directly raising rates for the poor. People don't like to see their tax bills go up directly - that's why Republicans always cut taxes for everyone. Their trick, of course, is that they have been cutting taxes for the middle class and poor by just a little, but cutting them for the rich by a lot. This way everyone feels like they're getting a break, but of course it's subtly shifting the tax burden downward, on a percentage basis. For each individual person, though, it's always a tax cut, so it seems like a good thing.

That's a viable strategy for tax cutting, but I don't think that the reverse really works for tax raising. Any time you start raising taxes people immediately get cranky (see Bush the First). If taxes have to start going up again, people are going to want to see the rich pay first. Since the poor outnumber the rich, I don't see how a tax increase that fell disproportionately on the poor would be politically viable, unless there was some kind of trickery involved. Given that a tax increase always gets far more scrutiny that a tax decrease, I just don't think that it would be possible for that level of trickery to go undetected.

FISA is a regressive tax on the lower classes.  It was raised well above the "pay as you go" rate back in the '80s on the advice of a commission headed by Alan Greenspan, and by mere coincidence I'm sure, the ballooning deficit of the time was then financed by the increased SS revenues.  It was used as a stealth tax to push the costs of government down onto the wage-earning class, and off of the dividend-income class.

You are correct in your assessment of that Republican tactic for shifting the tax burden downward.  Another tactic which was not quite as successful is the attempt to remove taxes on dividend income.  While the tax on dividends was not completely removed, it was fixed at a lower rate, which means that if a person in a lower tax bracket earns dividends, he pays a higher income tax on them than he does on his wages (although the wages also have a 14% flat tax as well, so the dividends still come out taxed at a lower rate) while a person in the top tax bracket actually gets a lower tax rate on his dividend income.

The tactic of differential tax cuts will eventually blow back on the Republicans, of course, for the very reason you noted.  There are more wage-earners than dividend earners.

It used to be that the dividend-earning class had overwhelming political power to protect it from the blow-back, because power emerges from the dollars in a wallet.  But now, with internet fundraising, the sheer mass of wage-earners' wallets  is starting to dwarf the sheer mass of dividend-earners' dollars, and I suspect we are going to see that blow-back very soon.

And if taxpayers cannot afford to repay the loans, they will be left paying the interest on those loans forever, or until the US as a nation officially declares bankruptcy.

It seems unlikely to me that we'll ever really get to that point. For better or worse, the IMF and the rest of the world could probably be relied on to bail us out, although we'd surely have to impose many of the sort of deficit control restrictions and so on that we've forced on the rest of the world over the last couple of decades. The most instructive example here is probably the late 1970s debt crisis that the UK faced (or France's about face on neo-liberalism in the wake of the disaster 1981-1982 economic collapse spurred by Mitterrand's dirigeste economic program). It would be painful, certainly, but I don't think we would necessarily see anything like a total economic collapse.

It is actually a fascinating suggestion, and one which had never occurred to me, that the financial problems of the US will eventually be solved through the intervention of the IMF.  It almost makes me feel more optimistic about the future.  But I don't really believe it.  If the time should come when the US has gotten itself into such a mess that only the IMF can stave off national bankruptcy, chances are the whole world will also be in a terrible mess, and the IMF will not even remotely have the resources to solve that kind of global catastrophe.  When the meltdown comes, it is likely to overwhelm all existing remedial mechanisms.  But who knows, maybe things won't really be that bad.  We shall see.

If the time should come when the US has gotten itself into such a mess that only the IMF can stave off national bankruptcy, chances are the whole world will also be in a terrible mess, and the IMF will not even remotely have the resources to solve that kind of global catastrophe.

A few years ago I would have agreed with you, but my hope is that the EU, combined with an East Asia (which has developed much better economic inter-cooperation itself since the '97 Asian Financial Crisis) lynch pinned by Japan and China, would be capable of bailing us out. Ironically this becomes more and more true as the value of the dollar falls - as the US economy shrinks vis-a-vis the rest of the world, the rest of the world has relatively more resources to help us out. If we see a sudden, catastrophic crash right now, then of course it would be a disaster. And if we see a world-wide economic collapse, that too would be a disaster. But I think if we just see a prolonged malaise, followed by a US-specific debt crisis, that this is something that could be managed.

That is a very reasonable analysis, and it's quite true that the growing economies of China and India could potentially compensate for weakness in the US economy.  But looking at the larger picture, the as-yet-unresolved and possibly unresolvable problem of the war on terror, the ever-growing problems of global warming, the ever-growing global population, the growing shortages of food and drinking water, and so forth, I still have to say that things are not going to work out so nicely.  Although it is, even now, not too late to fix things.  It would take an enormous and unprecedented global re-organization (presumably orchestrated through the UN, the only international agency which seems to have the potential for that kind of far-reaching global cooperation) to move the world in a positive direction, and it doesn't seem likely to happen, but it isn't impossible.

The interest payments on the national debt are the whole point.  They are a redistribution scheme from the poor to the rich.

Back in the late '80s when the national debt first became a concern, there was an article in one of the conservative journals about how it wasn't actually a problem, because the interest was going to People Like Us.  I believe it was written by Casper Wienberger.  It was remarkably candid.

I've tried to track it down recently, but haven't ever managed to do so.

The debt is also used in order to provide the argument that we just can't afford all those nice social services that we'd like to provide.  For some reason, this argument is never used against the latest huge defense contract.  We can always afford a huge, half-secret military budget, we just can't afford to maintain our roads and bridges or our social infrastructure.

It's true that it is the rich who lend money to the federal government (through the purchase of T-bills or other bonds) and who therefore are the ones to benefit from the resulting interest payments, although it seems to me that there would still be various other investments that could easily be made, such as investment in the stock market; it's not as if the wealthy really need to get the government to borrow money in order to create investment opportunities for themselves - although it may be that lending to the government is a particularly advantageous investment.

But I agree that it is very fishy how government indebtedness is seen as an obstacle to needed social services, yet somehow it never gets in the way of bloated military contracts.