ArcaMax

The trustees for Social Security have just issued their annual report. And, as we have learned annually over recent years, the system cannot meet its obligations.

According to this latest report, the Social Security system will not be able to meet its obligations to retirees by 2035. In 2035, the system will be adequate to meet just 83% of its obligations.

This is supposedly good news because the projected shortfall occurs one year later than reported last year.

But the change simply reflects the fact that the system is so massive -- it's the single largest government program, with annual expenditure of $1.2 trillion -- that small changes in assumptions in the planning model produce big changes in the projected results.

Young people today start working and immediately have 6.2% of their paycheck deducted in payroll tax for Social Security, with their employer matching this with another 6.2% -- all paid into a system that is bankrupt.

Our political leaders, to the extent they choose to speak about this issue, reiterate their commitment to "save the system."

But "saving the system" means just taking a bad situation and making it worse. Who wants to "save the system" by raising taxes, raising the retirement age or cutting benefits?

Many still believe that Social Security is some kind of retirement investment program, but it's not. It is a government tax and spending program.

Individuals are forced to pay the payroll tax. And those payroll taxes are used to pay retirement benefits for those currently retired.

Even if you think this is a good idea, it no longer works. When the system began in the 1930s, there were over 40 working Americans per retiree. Today, because of longer life spans and declining birthrates, there are just a little over three working for each retiree. Worker's taxes soon won't be enough.

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Copyright 2024 Creators Syndicate, Inc.