Friday, August 5, 2011

A small math problem for you---Your parents and grandparents would be greatful if you can solve it for them...

Math is the greatest enemy of our Federal budget---an increasing number of baby boomers approaching retirement relative to the number of workers working to pay the 6.2% payroll tax that funds Social Security payments. Here are the projected ratios.
Source: Social Security Administration
To Fix this imbalance, possible solutions are:

(1) increase the percentage paid by workers to something more than 6.2%
(2) decrease payments to Social Security recipients (i.e. indexing to a chained CPI)
(3) Some combination of (1) and (2)
(4) Economic Growth---Get to Full-Employment with higher wages (or even without) so at 6.2% more money is available for the "olds".
(5)  Immigration---it is a numbers game. The quantity and quality of your migrants.  If our domestic population is not growing sufficiently then we must look outside the borders.

Am I missing any other solutions? I would like to add to my list...
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