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What the Boomers Mean for the Future of Social Security Rumor has it that Social Security is bound to go bust under the strain of baby boomers' retirement. But how sound are the arguments for radical reform?One of the hottest topics in U.S. politics over the last six or twelve months has been the future of Social Security, and how demographic trends are going to jeopardize it. Specifically, it's said the aging of the 78-million strong baby boomer generation will break the back of a Treasury set to go bust as soon as they retire. Advocates of radical reform have convinced a significant portion of voters that privatization is the only way Social Security can go forward. But how reliable are the arguments in favor of overhauling the system?One frequently-cited statistic is that, while today there are just over three workers for each retiree, by 2040 there will be only two. While true, this observation ignores other relevant trends. Workers are increasingly productive, earning greater wages, and likely to remain longer in the workforce than previous generations of workers have done. All these factors mean that, at least until more baby boomers begin retiring, America's workers will continue to amass a definite surplus in the Fed's fund. While baby boomers may outnumber younger cohorts, there are also fewer senior citizens at present to claim the huge amount of revenue boomers now generate each year .Social Security has undergone minor adjustments in the past, and even former commissioners have said that such changes should be able to bulk up the fund sufficiently to meet the strain of baby boomers' retirement. Raising the cap on wages subject to Social Security, or re-investing surplus in a vehicle that will generate higher interest than Treasury bonds, could strengthen our Social Security program significantly.Reform advocates also argue that U.S. workers are better off when they can exercise greater control over their investments for the future. We have the right, they say, to direct a greater portion of our income taxes towards vehicles that make sense to us individually, and build towards fulfilment of our own individual plans. In keeping with our American heritage of personal freedom, they say, privatizing Social Security moves us towards a better "ownership society." Back To Mature Market News → Go To The GenerationTarget.com Mature Market Bookstore → |
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