Robert Samuelson summarizes the ugly facts about the future of social security:
It's no secret that the 65-and-over population will double by 2030 (to almost 72 million, or 20 percent of total), but hardly anyone wants to face the realistic implications:
-- By comparison, other budget issues, including the notorious "earmarks,'' are trivial. In 2005, Social Security, Medicare and Medicaid (the main programs for the elderly) cost $1.034 trillion, twice the amount of defense spending and more than two-fifths of the total federal budget. By 2030, these programs are projected to equal about three-quarters of the present budget, if it remains constant as a share of national income.
-- Preserving present retirement benefits automatically imposes huge costs on the young -- costs that are economically unsound and socially unjust. The tax increases required by 2030 could hit 50 percent, if other spending is maintained as a share of national income. Or much of the rest of government would have to be shut or crippled. Or budget deficits would balloon to quadruple today's level.
-- Social Security and Medicare benefits must be cut to keep down overall costs. Yes, some taxes will be raised and some other spending cut. But much of the adjustment should come from increasing eligibility ages (ultimately to 70) and curbing payments to wealthier retirees. Americans live longer and are healthier. They can work longer and save more for retirement.
There's more at the link. It is a shame that when Bush proposed a solution to the looming crisis a couple of years back, the Democrats fought him hard on it and the Republicans simply waffled. Bush shrugged, and nothing got accomplished, but the day of reckoning continues to draw closer.
Now that the Democrats control both houses of congress we can be sure they'll come up with a plan to avert the crisis.
RLC
