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You can’t even pay people to have more kids
(www.vox.com)
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this post was submitted on 28 Nov 2023
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LOL, we don't need to liquidate Apple. Current projections are that if NOTHING is done to reform social security, the trust fund will run out in 2033, and we will be able to pay out about 77% of benefits via annual revenues the following year, down to 65% in 2096. The exact percentage varies based on revenue and population trends, but we're talking about the majority of social security benefits being payable indefinitely, if nothing is done to reform it.
We could fill the gap and keep the trust fund going while paying out 100% of benefits by simply raising the cap for wages subject to the social security tax.
This social security hysteria shows how effective right wing propaganda has been at convincing all of society that government can't do anything. There are multiple options for saving the trust fund. Congress just needs to pick one and do it. The problem is that half of congress wants the elderly to starve to death.
Removing the cap doesn't actually solve the problem; it only delays it. Per a Congressional Research Service report, eliminating the cap today would still have the fund be depleted in 2054. You still have to raise the rate or reduce benefits in order to make the numbers work.
https://crsreports.congress.gov/product/pdf/RL/RL32896
That's to say nothing about how Social Security is objectively a very poor retirement plan and the average person would do much better by simply putting the money into any random total market fund instead, but that's another topic.
I know no one likes maintenance, but it's necessary. We reformed social security in 1981. We can do it again now, and we can do it again before 2054. I'd propose eliminating the taxable income cap and means testing benefits before we think about raising the rates or the retirement age again.
Social Security keeps over 20 million people out of poverty. Frankly, I don't give a shit about what's better for people who've had the means and the opportunity to save for retirement independently (of which I am one). We're talking about people who don't have enough to begin with. If you eliminated social security, assuming employers didn't just pocket the 6.2% and passed it on to their workers, the working poor would use that money for sustenance, not savings.
To be clear, I'm not actually against removing the cap, means-testing the benefits, or anything else. However, the political will for that sort of thing isn't really there, especially because it would represent a non-trivial tax increase on the kind of upper middle class vaguely moderate suburbanites that tend to swing elections.
My main qualm is that Social Security simultaneously attempts to be a mandatory government retirement plan and a welfare system and doesn't do a particularly good job at either of those things. As a retirement plan, pretty much any generic investment plan outperforms it, while at the same time, its ability to be an effective elderly welfare system is hugely hampered by this political perception of it as an "earned" retirement benefit as well as its less than efficient administration.
My main point here is that it's not accurate to say that there's just "one weird trick!" that cleanly solves Social Security forever. Even raising or eliminating the cap would come with very significant political pushback from an annoyingly important and temperamental voting block.