Paper Argues Social Security Shortfall Is Easily Fixable

[sunsnow]

I stumbled upon this and thought others might like to read it.
http://crr.bc.edu/images/stories/Briefs/IB_11-9_508.pdf

 

[Htown Harry]

Thanks for posting.

The "problem" is indeed manageable. The paper notes +1% increases in the employee and employer rates would erase the future deficit immediately:

Over the next 75 years, Social Security’s long-run deficit is projected to equal 2.22 percent of covered payroll earnings. That figure means that if payroll taxes were raised immediately by 2.22 percentage points – 1.11 percentage points each for the employee and the employer – the government would be able to pay the current package of benefits for everyone who reaches retirement age at least through 2085.

Besides increasing contribution rates, modest changes involving benefits or eligibility or the cap on taxable SS earnings are also capable of contributing to shoring the program up.

As I said in a post many months ago regarding a Senate Committee on Aging report on SS with many different options weighed and discussed:
http://www.early-retirement.org/forums/f28/social-security-needs-small-tweaks-50243.html

Dear Congress:

Please pick 10 changes from the list that will have the effect of spreading the following actions across the widest possible spectrum of the population:

• Pay a bit more now
• Get a bit less later
• Wait a little longer to get it

Move it along without delay, please, so you can move on to more challenging fiscal issues. Feel free to skip the hysterical speeches and politicking - I value solvency and stability in the system many times more than whether my payments or benefits might change a few percentage points.

Harry​

 

[Midpack]

The "problem" is indeed manageable. The paper notes +1% increases in the employee and employer rates would erase the future deficit immediately.

But politicians are afraid to even restore the 2% holiday, much less increase another 1% or 3% total. They know a large chunk of the electorate will pummel them if they even talk about touching SS much less actually doing something.

And I have a hard time compartmentalizing SS, knowing that we have large deficits and Medicare won't be as easily solved cost wise. We need to come to grips with entitlements (or whatever word you prefer), to preserve them at a sustainable level.