Is Social Security Currently A Good Thing?

JoeTheEconomist said:

Social Security is now pay-as-you-go system, and has been almost entirely since the day it was enacted. That means that 'your' money goes to pay for the benefits of existing retirees. Since 2010, the system hasn't put a penny aside for when anyone younger than 62 retires.

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Social Security's total income is projected to exceed its total cost through 2019, as it has since 1982. The 2015 surplus of total income relative to cost was $23 billion. However, when interest income is excluded, Social Security's cost is projected to exceed its non-interest income throughout the projection period, as it has since 2010. The Trustees project that this annual non-interest deficit will average about $69 billion between 2016 and 2019. It will then rise steeply as income growth slows to its sustainable trend rate as the economic recovery is complete while the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

After 2019, interest income and redemption of trust fund asset reserves from the General Fund of the Treasury will provide the resources needed to offset Social Security's annual deficits until 2034, when the reserves will be depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2090. The ratio of reserves to one year's projected cost (the combined trust fund ratio) peaked in 2008, declined through 2015, and is expected to decline steadily until the trust funds are depleted in 2034.

Under current projections, the annual cost of Social Security benefits expressed as a share of workers' taxable earnings will grow from 14.1 percent in 2015 to roughly 16.6 percent in 2038, and will then decline slightly before slowly increasing after 2050. Costs display a slightly different pattern when expressed as a share of GDP. Program costs equaled 5.0 percent of GDP in 2015, and the Trustees project these costs will increase to 6.0 percent of GDP by 2035, decline to 5.9 percent of GDP by 2050, and thereafter rise slowly reaching 6.1 percent by 2090.

https://www.ssa.gov/oact/trsum/

On the whole, yes it is. The idea behind it is sound, it just needs the retirement age raised.

molten_dragon said:

On the whole, yes it is. The idea behind it is sound, it just needs the retirement age raised.

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But this view I have some professional issues with. Social Security is presently structured as a Ponzzi Scheme and offers too much 'one rule fits all' approach. It should better be dumped for a low GMI that entails no in intransparency nor a bureaucracy but gives much expanded amount of freedom.

It confiscates money from my paycheck that would have a higher yield if I was allowed to invest with it. As a younger person I'll likely not see social security and I doubt I'll get back what I supposedly "paid in" for "myself."

Porkuloss said:

A few things:
1) Remove or move the cap up, and lower the percentage deducted if possible.
2) Shift it out of the General Fund as quickly as possible, making it an independent set-aside.
3) Possibly raise the age for benefits, subject to adjustment downward for people with health problems that prevent them from working.

it's not like the system won't work.

No, you should NOT necessarily expect to take out all of the money you put in. That's not how it works.

I've been hitting the max deduction for a couple of decades. I haven't calculated what I would need to get back to cover what I put in, but the confidence of knowing the amount stipulated on my statement will be there is an important part of my retirement plan. We have put away a good deal of money for retirement, but that extra check is an important part of the picture. If I expected to die before age 75, I wouldn't care.

I get that the extremely wealthy who don't need it don't like the system.

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As an economist I think USSC has the drawbacks i mentioned. People would be better off with a different system as would the country. But it works okay for many people in a suboptimal way.