traineeinvestor
Thinks s/he gets paid by the post
But that's the joke . . . people on the verge of collecting SS already spent the money, mostly on themselves! The people who "chose not to fund" the SS "trust fund" are the very same people who think they are entitled to payments from this pile of money that doesn't exist.
Here is an example to illustrate . . .
Social Security takes $10 from Citizen A in payroll taxes. That $10 goes into the government's general revenue fund. Mr. Nice Politician says "Hey look, we have a $10 surplus! Why don't we spend $5 on current services and $5 on tax cuts for everyone?" Citizen A votes for the Nice Politician and everyone celebrates their good fortune. Mr. Nice Politician uses the $10 in SS "surplus" to fund all the goodies, and gives the SS trust fund an IOU in return. Many years later, it's time for Citizen A to retire, but low and behold, there is nothing in the trust fund to pay for his retirement benefits but IOUs . . . who's to blame? Citizen A who already got $10 in benefits for the taxes he paid, or "Still Too Young to Vote" Citizen B who neither voted for this system, nor got any benefits from it?
And if we want to be accurate, Citizen A actually voted for $11 or $12 in tax cuts and services considering the general fund deficit we've been running for several decades now. Given the circumstances, it's kind of hard for Citizen A to argue he has a right to anything other than the clean-up bill.
+1
Given that the choices are:
1. Citizen A who has already taken the money (and more); or
2. Citizen B who has received no benefit (and most likely will have to provide for themselves to a far greater degree than previous generations as well as picking up at least part of the cost of the actions of Citizen A),
the answer seems clear. It is not as though the Citizen As of this world can say that they didn't see this problem coming - the unsustainability of pay as you go financial practices has been debated since at least the early 1980s.
Of course nothing is ever that easy because everyone wants someone else to bear the cost, and the reality is that recipients of transfer payments will have to make do with less (and get it later) and taxpayers will have to pay more.
Put differently, the other way of looking at the choices are:
A. the Greek model - do nothing until things start falling apart
B the French model - take tepid fractional measures which will have only a limited impact
c. the British model - be decisive and take the rather painful measures to get the country's finances back on a sustainable path
The other related issue is how to get the economy growing at a pace which will create jobs. Introducing reduced and simplified regulations will make life a lot easier for small businesses (which account for a very high proportion of new job creation) would be a good first step.