That was then.
Many economists now predict that the system will collapse within a generation. The problem is straightforward: The baby-boomer?s impending retirement will cause a shift in the workforce so pervasive that the social security system will become top heavy, like an inverted pyramid. In other words, too few workers will be supporting too many retirees. As a result, the cash outflow in social security benefits will exceed the cash inflow in taxes
Perhaps this is a good time to mention, there exists no social security surplus. The social security trust fund is filled with old, yellowed scraps of paper that read, ?IOU.?
So what we?re looking at is the impending bankruptcy of the entire social security system. Experts predict that on or about the year 2032, the social security system will collapse.
This situation takes on catastrophic proportions when you consider that 66% of elderly Americans use social security payments as their primary source of income. This point was not lost on President Bush. During his State of The Union address, earlier this month, the President proposed a drastic overhaul in the system. He?s been on a cross-country sales pitch ever since, preaching the merits of allowing some Social Security funds to be invested in private accounts.
Predictably, the Democrats united in opposition. They talk about how privatizing social security funds gambles the future of our seniors on the stock market. But they offer no counter proposal. At best, they try to forestall the problem by raising taxes, passing legislation to extend the retirement age and paring away our promised benefits. However, you can only raise taxes or increase the retirement age by so much. The problem of too few workers supporting too many retirees will continue to lurk as long as infant mortality rates continue to decrease and life expectancy continues to increase.
The only way to actually solve the problem is to transfer our social security taxes into privately managed universal savings accounts. Under such a system, each individual would be responsible for managing his retirement savings. Rather than have his money bogged down in a low-yield treasury bill (as currently is the case), an individual could benefit from much higher rates of return in the stock market.