Why wont social security be around in the future> how did this problem come about?

Answer 1

The government takes out of the surplus to pay off debts or expenses and to many people are paid benefits. Social security was first meant as a retirement fund not an investment fund. Now it is used for disability, widows, chilren of disabled or deceased. People are living longer and most people get back what they put into it within 3-6 years. When the babyboomers retire there will be less people in the workforce. Currently, they are expecting that if nothing is done that people will get 70 %percent of their expected benefits. SSA does need to reveiw and reform it entitled programs but Medicare is estimated to go belly up by 2017.

Answer 2

Because social security is a ponzi scheme. When the program started there were very few people that lived long enough to collect actual social security benefits and the benefits weren't that great. So you had a large number of working people paying for a relatively few people drawing the benefits.

This system would work as long as the population was steadily growing or stable, and if benefits were not increased. Several things happened to expose the ponzi scheme. First right after WWII there was a population boom, the baby boomers. The boom ended in the 60's. But it created a slug where a large percentage of the population was in a relatively narrow age group right now they are between 40 and 60 which means in just a couple of years the number of people drawing social security will increase dramatically. At the same time the number of people working will start to level out.

The result will be a cash flow crunch. This was supposed to be offset by an increase in social security taxes the first of which started in the 1970's. We were told this would create a "trust fund" to help us get past the baby boom crunch. But the trust fund never existed. Extra social security taxes that have been collected were spent in the year they were collected and an entry was made in a ledger kept in a two drawer file cabinet. Recently politicians trying to get cover issued a government bonds to place in the same file cabinet to quell complaints that the trust fund did not exist. Which is in fact just an IOU, although more formal than the line entry in the ledger.

On the ledger social security will still not be bankrupt till well after 2050. However the payout of benefits will exceed the cash collected in just a few years. The extra we are paying now moves back the date from 2008 but soon after that social security will not be able to pay benefits unless tax dollars are diverted from other spending, social security taxes are increased, or benefits reduced.

I don't expect social security to last past 2012.

The problem came about by adopting socialist programs which are all doomed to this same outcome. You can't consume more than you produce, it simply doesn't work. Because eventually you run out.

Answer 3

1. People are living longer. Every year people live collecting SS they are living off of the money in the SS system. When people retired at 65 and lived to be 70, that wasn't a problem. Now people are often living well into their 80s and even 90s.

2. The US has recently approved illegal aliens who have worked in the US for 18 months to be eligible for SS. That basically means they will be entitled to money benefits from a system that they did not pay into. ...they will get to retire with money YOU saved. That means YOU will get less of the money YOU saved.

3. The problem boils down to irresponsible politicians who do not want to deal with the problem. They simply pass the problem along to the next group. Eventually that problem is going to come home to roost, and it won't be long. Remember, politicians are the enemy, they are not there trying to do what's best or what's right...just what will let them stay in office.

Answer 4

SS won't be around in the future because congressmen such as Kennedy decided that SS was a fund they could raid to finance their initiatives. Originally, it was to be invested and grow so that the returns would be the payoffs. Since the Democrats in congress have raided the returns, they don't exist anymore. That is why they fight so hard to have retirement funding invested - if it is invested and growing (or if each person is investing their own), they can't use it for their selfish reasons. Incidentally, Hilary Clinton likes the idea of using SS for government funding...and taxing us on top of that!

Answer 5

social security was planned when people rarely lived beyond 70 years of age. Now that the median age is 77 and rising, the plan will surely go broke unless the median age is raised much higher to draw.