[The # of boomers retiring] will raise the percentage of GDP spent on Social Security from about 4 to 6 -- that is, a rise of about 2 percentage points of GDP, which is a small fraction of the entitlements problem. See, for example, this chart from my NY Review of Books piece on the subject.

Krugman obviously knows more about this than I do but even he says expected SS outlays are a "small fraction of the entitlements problem". "A small fraction" is still signifiant. I agree that health-related expenditures are a bigger problem but Obama (and every candidate) addresses those costs with a comprehensive health care plan.   The flaw in Krugman's "small fraction" construction is that politicians talk about far smaller amounts of money (space weapons, foreign aid, earmarks, etc.) all the time. It's still OK  for pols to talk about issues that are modest problems isn't it? You have to buy the argument that Obama is opening up a can of worms by discussing Social Security at all and I don't buy that argument. Obama agrees with Josh Marshall on a policy proposal to raise the cap on SS payroll taxes. Maybe I'm dim but I don't see how elevating a rhetorical disagreement with Obama trumps the substantive policy agreement that most progressives have when it comes to raising the SS cap.

2) Krugman on 2017:

OK, from some communications I see that 2017 -- the projected date at which payroll taxes no longer cover benefit payments -- has raised its ugly head. But there is no interpretation under which 2017 matters. Social Security legally has its own dedicated funding; if you believe the government will honor the law, the surpluses the system is now running are building up a trust fund, which will finance the system for decades after 2017, and maybe forever. If you think the law will be ignored, then Social Security doesn't really have its own budget -- the payroll tax is just one of many taxes, and SS benefits are just one of many government costs. In that case the relationship between payroll taxes and benefits is irrelevant.

The only way to make 2017 matter is to change the rules midway: when SS runs surpluses they don't count, but when it runs deficits they do.

Here's where Krugman is technically correct but I think he misreads the politics. It's not black and white how Congress applies the rules. Depending on how Congress behaves 2017 could be quite meaningful. Congress can shade how the SS surplus funds are blended with general funds and even write new rules. Robbing Peter to pay Paul and avoid taking a stand before the voters is what most politicians do. It's most always gray in Congress, not so clear as Krugman says. I'm hoping that not only will Congress NOT raid the SS surplus that they'll take the example of an Obama SS reform package to heart and move ahead to address the general budget crisis (I know this makes me look incredibly naive). Contra Krugman, if the dispostion of the surplus was an absolute non-issue then Al Gore wouldn't have spent so much time talking about the "lock box".

3) Krugman on the "lock box":

The need for the lockbox arises from two crucial facts about the federal budget. First, that budget is dominated by the retirement programs, Social Security and Medicare -- loosely speaking, the post-cold-war federal government is a big pension fund that also happens to have an army. Second, a decade from now the population served by those programs will explode, as the baby-boom generation reaches retirement age.

Because of those facts, merely balancing the federal budget would be a deeply irresponsible policy -- because that would leave us unprepared for the demographic deluge, with no alternative once it arrives except to raise taxes and slash benefits. To ease the burden we should run large surpluses for the next decade -- surpluses that will pay off the federal debt, and perhaps help purchase assets to back promised payments.

If politicians were saints, we could count on them to run the needed surpluses without imposing a rigid rule. But in the real world politicians need an artificial backbone. And hence the concept of the lockbox. The Social Security system is currently taking in more money than it pays out; the lockbox says that this part of the overall budget surplus is not available for tax cuts or spending increases.

That's from July 2001 and obviously we didn't run the surpluses to pay down the debt and it looks to me like the economy isn't going to be growing at a robust rate in the coming few years. Krugman circa 2001 still had SS as #3 entitlement problem but he still considered it a problem. It's only after the 2005 debates that this 'There is No Crisis' mindset took hold and I think it's backwards looking and obscures the kind of policy debate Krugman was having in July 2001.

4) Big Tent Democrat on me:
 

I'm trying to say raising the SS cap will buy time to address the general fund issues.

And you reason for believing the Congress would NOT is what?

Maybe I'm naive but I have to believe that people in a democracy will act through their government to either get new leaders (President Obama) or change the behavior of existing officials to the point where problems can be addressed and govennment can be competent and rational. If I DIDN'T believe this why should I bother debating issues with you -- to what end are we having this discussion if not to sort out the issues and then acting upon them in some kind of consensus? The cynic in me wanted to get an EU passport in 2005 because the damage to my country is irreparable. The optimist in me sees Obama as a real leader in the mold of FDR or Kennedy who can change attitudes and accomplish great things.

Congress right now is an awful mess even with the new Democratic leadership. I know that. Maybe it's because I grew up with decent Republicans in government in the Northeast that I think it doesn't ALWAYS have to be so bitter working across the aisle. Maybe the far right can be beaten back into it's John Birch cage and the country can really move forward. The Democratic Party is finally free of it's racist Dixiecrats and if the existing party can build a governing coalition with 15-20% of the GOP caucus this country can really make some progress towards the "life, liberty, and pursuit of happiness goals". I'm probably unbelievably naive for even entertaining that thought but the alternative is giving up.