Why reform Social Security?
It isn’t sustainable. People are living longer and are having fewer children. The ratio of workers to retirees is falling. We started out with 16 workers for every retiree 70 years ago. Now we have three, and we’re going to two with the baby boomers. The pay-as-you-go system works great when you have 16 people paying in contributions for every person drawing benefits. But when you get to 2 to 1, the system is in jeopardy. Q: So is this a crisis? A: I leave it to semanticists to tell us whether it’s a crisis or not. But it seems to me it’s a pretty serious situation. In 2018, the lines cross so that the outflows [in benefit payments] exceed the inflows [from contributions]. By 2042, the surplus built up in the Social Security trust fund is exhausted, and the system is technically bankrupt. It’s time we modernize Social Security so it can be sustained for future generations. Q: That seems like a long way off. Why act now? A: Every year you postpone action, the problem becomes bigger and
