It’s disturbing to hear young people say that Social Security won’t be around when they retire. But it’s not just young people. I’ve heard older Americans–some of them receiving SS benefits–claim that SS is dying. I think that if young and old knew the facts, they would be armed to support SS against the Party of Bads and Stupids that wants to tear it down. Here are common views and my responses.
My nephew Bob, a college senior, informs me: “Social Security is bankrupt. Everyone knows that.”
Not so fast. Right now there’s a $2.8 trillion surplus in the SS fund. But it’s true: by 2030, SS may be able to pay only 79% of expected benefits. Why? The worker/retiree ratio is getting worse. Also, wages have not grown much and that limits contributions. Higher unemployment during the Great Recession didn’t help either. Finally, as more income shifts to the rich, less is taxed. In other words, more inequality causes financial shortfalls for Social Security. Currently only the first $118,500 of wages are taxed. If you earned that much last year, you paid $7,347. So did Kobe Bryant and Donald Trump.