How to fix Social Security in 3 easy steps
From Barry Ritholtz:
I am going to hazard the surprising forecast that Social Security will never run out of money. If that sounds like some sort of economic blasphemy, just take a look across the pond for a glimpse of SS’s future. President Sarkozy of France (France!) is showing not only Greece how to get its welfare state in order, but he is also demonstrating to us Americans what the future of entitlement programs look like.
Details here.
Comments
Social Security is the largest Ponzi scheme in the world: No investment is being made, just new payments being used to pay old debts.
Posted by: Peter | June 17, 2010 9:57 AM
Multiple papers have suggested 71 is the magic number for solvency at current tax and benefit rates. It is also a number inline with the original intent of SS when adjusted for increased life expectancy.
As for the 106k gross wages cap, it's what makes the SS payroll tax the most regressive of taxes. How have we allowed it to stand as long as it has? Perhaps because those with earnings over 106k wield a disproportionate amount of political influence.
I certainly agree that regardless of what does or does not happen, SS will never run out of money, at least in nominal terms. To think otherwise would be to "not think 4th dimensionally" as Doc Brown would put it.
Posted by: Josh Dowlut | June 17, 2010 2:29 PM