For 77 years, the Social Security system has been a safety net for
American seniors, vastly reducing the rate of poverty among the elderly
and changing the quality of life for most Americans.
That was yesteryear.
Many economists and common-sense Americans now predict that the system will collapse within a generation. The problem is straightforward: The baby boomers' impending retirement will cause a shift in the workforce so pervasive that the Social Security system will become top-heavy, like an inverted pyramid.
In other words, too few workers will be supporting too many retirees. As a result, the cash outflow in Social Security benefits will exceed the cash inflow in taxes.
So what we're looking at is the impending bankruptcy of the entire Social Security system. Experts predict that on or about the year 2032, the system will collapse.
This situation takes on catastrophic proportions when you consider that 66 percent of elderly Americans use Social Security payments as their primary source of income. This point has not been lost on Paul Ryan. Before his selection as Romney's running mate Ryan proposed a drastic overhaul in the system. He was on a cross-country sales pitch, preaching the merits of allowing some Social Security funds to be invested in private accounts.
Predictably, the Democrats united in opposition. They talk about how privatizing Social Security funds gambles the future of our seniors on the stock market. But they offer no counterproposal. At best, they try to forestall the problem by raising taxes, passing legislation to extend the retirement age and paring away our promised benefits.
However, you can only raise taxes or increase the retirement age by so much. The problem of too few workers supporting too many retirees will continue to lurk as long as infant mortality rates continue to decrease and life expectancy continues to increase.