"Yep, the SS is a scary scheme ...it will implode on it's own."
Yep, but the timing is somewhat adjustable.
If the government were not using the HUGE inflow of annual SS receipts into the general budget right now to hide the TRUE size of the current deficits --- then, believe it or not, despite the demographic problems caused ('predictably', I'd add) by the Baby Boomer Bulge that's coming --- the SS program itself would not run negative until well past the middle of this Century... and then by a fairly smallish percentage.
Unlike most of the 'Developed World' (Japan, Europe, etc.) our population is still growing at a far clip (about the same population growth percentage as China now, I think... maybe more) because, same as per usual, of our large imigration rates.
What's approaching extremely SERIOUS financial imbalance now though --- with fiscal problems much worse then SS --- is Medicare/Medicaid.
With better then a half Trillion dollar cost added to the program (first 10 years) because of the new drug benefit... and with pharmaceutical costs rising double digits each year, as they have for a number of years now, Medicare is scheduled to go bust right around 2019 I think.
Only by lumping Medicare and SS together does the SS problem appear more immanent.
(PS --- I've always believed that the best retirement system for the US would be one where most of the worker contributions went into true investment accounts... not simply signed over to the government (who then hands what's needed over to current receipents and keeps the difference), especially since the average 'ROI' for money paid into SS has averaged around 1.5%.
Chile, for example, made a move to a payed-in retirement system in the early 1970s, and has had great success.
But the problem has always been that no Pol here could ever afford to propose the generation-long pain of paying for a transition to a (better) investment-based system.
If Bush proposes this Thursday night though... he will have to explain where the estimated Trillion dollars in transition costs are going to come from. Not exactly easy when you are running around 1/2 Trillion dollar deficits into the forseeable future.... |
