MILES CENTRELLA & SAM METZGER
Staff Writer & Editor-in-Chief
Arguably the biggest problem facing our country is one no one is talking about. According to recent fiscal projections, social security will go bankrupt in 25 years. There is no fall back and no plan. As people pay money into Social Security, Congress spends that money immediately for other affairs, and borrows money to pay for individual’s social security funds. What is the government going to do? It will be important to be aware of how the federal government will resolve this problem and if they can coordinate some protection for the American people.
“I am puzzled about people’s naivety towards the situation and I think millennials should prepare for retirement without SS,” said Mr. Villa.
Social Security was originally implemented during the Great Depression as part of President Franklin D. Roosevelt’s New Deal. It was important to create a system that would reduce the poverty level among retired citizens. The system works by people diverting a certain percentage of their paycheck into a social security fund. That money is pooled together and used to support current retirees.
The problem with social security today stems from the fact that the “baby boomer” generation is in the process of retiring. Because of the large population of 65-75 year olds retiring, there are not enough funds in the social security reserve to pay for the people who are about to retire. This could lead to a large increase in the retiree poverty level, and lead to other complications for the future.
Many people advocate for the privatization of social security. They believe that if people manage their own social security accounts, the system will stop running at a deficit. This argument is invalid because the money used to fuel the social security trust fund would instead be used to pay for private accounts. This means that the reserve would dissipate even faster than projected by the Social Security Administration (SSA).
By 2037, the social security reserves are expected to dry up entirely. To stop this, either the payroll tax will have to be increased, meaning more of your paycheck going toward social security, or a significant reduction of benefits. The $20 trillion national debt does not help either, as a Republican Congress will push for tax cuts and rampant reduction of spending, cutting federal contributions to Social Security.
Congress spends this money on other affairs including government contracts, medicaid, and other entities. This leaves the government in a position where they have to borrow money to break even.
The federal government must take action to insure that working-age citizens receive the benefits they deserve once they retire. Congress must put their partisan interests aside, and come together to save social security.
Photo Courtesy: Wikipedia