Social Security turned 80 last week, but the report published in July by the Board of Trustees suggests the program’s days remain numbered. Despite increasing its life expectancy from 2033 to 2034, the program is still set to run out of reserves for the Disability Insurance Trust Fund by late next year. Medicare’s Hospital Insurance Program is also estimated to run out of funds in 2030.
According to a new AARP survey, two thirds of Americans view Social Security as one of the most important government programs but just 43% express confidence in the future of the system. This lack of confidence appears to be justified by the most recent figures. Social Security is expected to pay out just 75% of benefits after 2034, and the system is fundamentally broken, with 10,000 baby boomers retiring every day and the ratio of workers paying in expected to fall from 2.8 to 2.1 by 2033. According to the Wall Street Journal, since 2010, Social Security has paid out more in benefits than it has collected through taxes.
Economist Laurence Kotlikoff told the U.S. News that “the writing has been on the wall for decades.” Kotlikoff proposes dismantling the system entirely before the next generation reaches retirement and beginning to pay into a new system which would have higher contributions, as well as increasing the retirement age. Kotlikoff also criticises how needlessly complicated the current system is.
If you believe the Board of Trustees’ report just emphasises that the U.S. Social Security program, in its entirety, needs a drastic and long overdue overhaul, please Like & Share this post.