And what happens the population continues to age, and we have more and more people depending on the aid of the young? The problem is going to continue to grow, and the equal growth of our tax base is far from guaranteed.
"Social Security is not at all responsible for the federal deficit. Just the opposite. Until last year, Social Security took in more payroll taxes than it paid out in benefits. It invested the surpluses in Treasury bills -- in effect, lending them to the rest of the government.
But now Social Security has started to pay out more than it takes in. So to keep it going, it collects only what the rest of the government is obligated to pay it. This will keep it fully solvent for the next 26 years."
"Remember, the Social Security payroll tax applies only to earnings up to a certain ceiling. (That ceiling is now $106,800.) The ceiling rises every year according to a formula roughly matching inflation. Back in 1983, the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security. That 90 percent figure was built into the Greenspan Commission's fixes. The Commission assumed that, as the ceiling rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.
Today, though, the Social Security payroll tax hits only about 84 percent of total income.
It went from 90 percent to 84 percent because a larger and larger portion of total income has gone to the top. In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today the top 1 percent takes in more than 20 percent.
If we want to go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000.
Presto. Social Security's long-term (beyond 26 years from now) problem would be solved.
So there's no reason even to consider reducing Social Security benefits or raising the age of eligibility. The logical response to the increasing concentration of income at the top is simply to raise the ceiling.
Not incidentally, several months ago the White House considered proposing that the ceiling be lifted to $180,000. Somehow, though, that proposal didn't make it into the President's budget."
- Robert Reich, Economist/Professor/Former Secretary of state under 3 presidents.
Robert Reich: Budget Baloney: Why Social Security Isn't a Problem for 26 Years, and the Best Way to Fix It Permanently
The correct answer is to incentivize people people to control their own health care costs. We had a very distorted healthcare for some time.
The leading cause in bankruptcy in the US is health care cost, you don't think that is an incentive? We don't need less health care, we need more affordable health care like the rest of the industrialized world.
That is why more and more Americans are forced to go to China and India and other countries for treatment where health care cost is much lower.
Affordable health care for the average American is being outsourced:
"Factors that have led to the increasing popularity of medical travel include the high cost of health care, long wait times for certain procedures, the ease and affordability of international travel, and improvements in both technology and standards of care in many countries.[7] The avoidance of waiting times is the leading factor for medical tourism from the UK,
whereas in the US, the main reason is cheaper prices abroad."
Medical tourism - Wikipedia, the free encyclopedia