Sunday, May 23, 2010

Wanted: Ambitious, hardworking young people to pay for my Social Security--apply within...

The elephant in the room for the welfare states of the world (US included)...This graph (NYTIMES) shows the Worker per Retiree ratio from the 1950's projected through 2030.  In the US we have gone from 7 workers to 1 retiree in 1950 to appox. 3 to 1 today and it will be close to 2 to 1 in 2030.  Our birth replacement rate has decreased (historically typical for mature and rich societies) and people are living longer than ever.  Math is getting in the way of the social safety net. The largest problem for the US is Social Security and Medicare...Solution?  Higher taxes for workers and raising the retirement age to at least 72 (or more?).  The higher taxes part is controversial, and any one that knows me, knows that I am highly averse to that solution.  However, I don't see an alternative.  Cut spending? Or more accurately, control spending, YES, but the shear number of eligible retirees coming online in the next 10 to 15 years is going to swamp any savings relative to benefits paid out. We can work to save money per beneficiary but the volume of recipients is going to financially overwhelm the social security and medicare system...Look at the graph---it tells the story.  Sorry, young people! There are simply too many of us "olds" for you to support...
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