Social Security is financially unsustainable from "summary" of Free to Choose by Milton Friedman
The current system of Social Security, as it stands today, is on an unsustainable path. The reason for this is simple: the number of people receiving benefits is growing at a faster rate than the number of people paying into the system. This imbalance is creating a significant strain on Social Security's finances, and if left unchecked, it will eventually lead to a collapse of the entire system. One of the main reasons for this imbalance is the changing demographics of the country. As the population ages and the birth rate declines, there are fewer workers available to support the growing number of retirees. This puts a tremendous burden on the system, as there simply isn't enough money coming in to cover the benefits going out. In addition to the demographic challenges, there are also structural issues with the way Social Security is set up. The current system operates on a pay-as-you-go basis, meaning that current workers' contributions are used to pay for current retirees' benefits. This worked well when there were many more workers than retirees, but as the balance has shifted, it has become increasingly unsustainable. Furthermore, the current system relies heavily on the trust fund to make up for the shortfall between contributions and benefits. However, the trust fund is projected to run out of money within the next few decades, at which point benefits will have to be cut or taxes raised to make up the difference. This is a situation that is simply not sustainable in the long run. In order to address these challenges, significant reforms to the Social Security system will be necessary. These reforms could include measures such as raising the retirement age, reducing benefits for higher-income individuals, or allowing workers to invest a portion of their payroll taxes in private accounts. While these changes may be politically difficult, they are essential if we are to ensure the long-term viability of Social Security.- The current path of Social Security is unsustainable, and without significant reforms, the system will not be able to meet its obligations to future generations. It is imperative that we take action now to address these challenges and ensure that Social Security remains a stable and reliable source of support for retirees in the years to come.
