Bits and Pieces 8: Is It "Indisputable" that "Social Security Is Going Broke"?
As the article explains, ” revenue collected through payroll taxes, plus interest, will be sufficient to fund retirement benefits until 2023. After that, Social Security will have to dip into the Trust Fund until the trust fund runs dry around 2036.” That is true, but the Social Security Trust Fund was set up to pay for the surge in baby boomers who will go into the system the next few years, and when it is exhausted, its job will be done. After 2036, Social Security will be able to pay 77% of its obligations through collections, which is hardly going broke.
Just as Social Security was changed in the 80’s to allow for the surge of baby boomers, it can also be changed to allow for the short-fall that will start occurring in 2036. Currently, wages over $106,800 are not subject to SS withholding taxes. A recent poll found that the change most Americans prefer is to also subject wages over $106,800 to Social Security taxes – which would extend the Trust Fund through 2083.
Claiming Social Security is going broke is a wrong and harmful idea as it plays into the hands of those who want to change Social Security for political and special interest purposes.
(c) 2011 J.C. Moore