As I said, I've nothing more that could be productively added to the nomenclature question. I'm sure many would argue it would have been improved had I said less. By all means call FICA a tax.
I think you are confusing some things from your comments on voluntary and varied contribution to retirement accounts. It is why I noted that SS is like a pension plan, not a 401k or similar system or hybrid. The operation of a traditional pension plan does not involve voluntary contribution, it is part of the compensation for employment and the benefit and resulting cost is set by the employer, regardless of whether they pay that cost into the plan on an ongoing basis or make a lump sum payment at some point.
The reason I went into the structure and operation is twofold. First your statement that SS is not a contributory plan, which I hold that it is and that absent insertion of funding from outside sources is the only thing it can be. And secondly because it could, and perhaps should, be considered and run as a function entirely outside the general tax revenue funded operation of the rest of the government. Rather like the USPS, to throw in a call-back to a different recent forum discussion.
Regarding which, in the sort of digression anyone who suffers through reading my posts here should be resigned to by now, I happened to look up the pricing of the German postal service, that having been put forth as an example of the advantages and efficiencies to be gained through privatization of government services. It costs nearly twice as much to send a letter via their privately run service as it does to send one across the US via our quasi-governmental USPS. Yay privatization!
Although I gather it really isn't an aspect central to your interest in the subject, I don't understand one of the numbers you put forth - that the total interest contribution was on the order of 1/5th. That seems mighty low. To do a quick back-of-the-envelope linearization using my rough averages of a 40 year working and contributing period and a 20 year retirement payout period, the average contributed dollar is in the fund for 20 years, and the average dollar remains there for 10 years during the payout period. That is, the average dollar would be in the pot for 30 years of the 60 year span. Even at 1%, the interest contribution would be about 1/4th, that is the sum would be about 1.34 times the contribution. At 2%, the return would be 80%. A quick search on treasury rates says:
Throughout the 1950s, 10-year rates ranged between 2 percent and 4 percent, while in the late 1960s, rates moved into the 5 percent to 7 percent area. By the 1970s, rates moved higher still and in 1975 were more than 8 percent, moving to a high of more than 14 percent in 1982
Read more: Treasury Rates History | eHow.com http://www.ehow.com/about_5556363_tr...#ixzz1c8ELPhbH
Now actuals would be lower than the considerable gains expected from such rates due to some of the things you noted - that those managing the fund saw at different times that the fund was out of balance and made various changes to try to correct that, but due to these imbalances the sum in the fund was less than the formulas require for sustained operation and thus the accumulated interest return would be lower. Still, 1/5 seems unaccountably low, so I'm curious as to where that came from and what could explain it if correct.
Finally (well, nearly) though it may not be what you meant, the existance of the "trust fund" isn't a cushion, an element of comfort and convenience like one might keep handy in managing personal finances to cover unforseen contingencies. It is how a balanced system works, its the math. The previously presented formulae describe it, and if you like to play with spreadsheets you can stick them in EXCELL and plot them out. If that sum isn't there, the system is out of whack and is headed for a crash. (Of course, one could also set contributions too high or payouts too low and the sum and trust fund will increase without bound.)
Oh, and to your individual/aggregate question, the R and C in the quote refer to each individual. If the system is perfectly balanced, and the number of people remained constant, total annual payouts, the sum of the Rs will also exceed the total annual contributions, the sum of the Cs, since money is gained through the interest. The trust fund would remain constant and the system would indeed be self supporting.
Finally, (really this time, I promise) I'm not saying that the system needing to be adjusted and rebalanced necessarily means somebody screwed up. Things change. Changes in things like life expectancy and projected earnings alter the outlook, and as I said earlier there are other things added onto the simplified saving/retirement model in the actual SS system, like disability payments. The screwed up part is that adjusting the system to bring it back into balance involves politicians. Some will yell about the government taking more of people's money as we see, others want to see the system crash for philosophical reasons or because they support interests they think will profit from privatization, others don't want to expend the capital and effort to fight over fixes when they have other priorities. As a result, things can get further out of balance then they should before being addressed, and changes made can be poorly done through political compromise. The system requires management in a changing world, it doesn't self-regulate, being what is called an open-loop system.
Finis (at last!)