Hey Guys, Can You Fix This?

For five minutes forget about global warming and melting ice caps. Rest your mind from Darfur and the conflict in the Middle East. Close your issue of US Weekly and ignore any current cause that Angelina Jolie wants you to support. As a young American, you should be concerned about something else at the moment: Social Security.

Usually, any mention among our age group of Social Security reform evokes images of suspendered actuaries hunched in front of a computer screen fiddling with calculations. Social Security? Save the problem for the old people, we say, as we listen to Live Earth concerts and contemplate world issues that really matter.
It’s time for us to get smart. Older people don’t want Social Security reform—not if it means cutting their benefits. Politicians are afraid to raise taxes to fix the problems, and any mention of benefit cuts immediately brings fiery threats from powerful lobbyists like the AARP. The politicians of today will not make the necessary changes today because the problem isn’t manifest today. The Social Security problem is a crisis for tomorrow, a headache for the next generation, our generation.

Consider this: according to U.S. Treasury projections, by the year 2017, Social Security will collect less than it owes. By 2041 (about when some of us might retire), all of Social Security’s reserves will be exhausted. Anyone born in our generation will receive less in lifetime benefits than in payments that we’ve made to Social Security. Because Social Security is a pay-as-you-go program, the government cannot “pre-fund” Social Security with surpluses today unless it saves rather than spends those surpluses. This isn’t happing right now. Instead, the current Social Security surpluses usually result in some combination of higher government spending on non-Social Security items, or in lower taxes. In short, the Social Security tax we pay now (and will pay in the future) does not come directly back to us. And the demographics are clearly not in our favor when it will be our turn to look for the nation’s young workers to pay our Social Security benefits when we retire.

Next time you pick up your paycheck, take a long look at the 12.4% of your wage that goes towards Social Security. With our current program, you’re getting a negative return on this retirement “investment.” The saddest twist is that no one in our generation even seems to care.