The Demise of Social Security |

The Demise of Social Security: Not With A Bang, But A Whimper

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The Social Security program is on a long, slow path to oblivion.

The Government has long fostered the idea that Social Security is an equitable system whereby the US worker will have the opportunity to get back what he or she has contributed over a lifetime of work.

The reality, though, is an ever-diminishing return, as the rules of the game have been constantly altered in The Government’s favor in order to keep the system solvent.

Kirby R. Cundiff writes:

Retirees in 1977 are estimated to have received seven times what they paid into the Social Security system. Retirees entering the program as recipients today will probably receive a negative return on their “investment.”

 

By the late 1970s, it became obvious that the Social Security system was going to have significant solvency problems since the ratio of workers to retirees decreased from around 40-to-1 in 1945 to around 3-to-1 in 1980, and most of the money paid into the system had been spent on other government programs.

 

Under that current benefit formula, if a Social Security enrollee has a life-time income over $2 million, he will very likely have a negative return on his investment. For lifetime incomes between $0.5 million and $2 million, the enrollee has a chance to break even. Enrollees with a lifetime income less than $0.5 million have a good chance of still benefiting from the Social Security system.

 

Read more at Mises.org

 

 

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