I’ve been saying this for years. Actuaries have known this since the 1970s.
For the 28 percent of Idaho’s population who are Millennials, politics probably looks pretty bleak this year. No wonder: Both parties are actively trying to ruin our futures.
I’m talking about what Democrats and Republicans want to do with Social Security. No one should be surprised to learn that this federal program is on the fast track to bankruptcy — that’s been well-known for more than a decade.
What is surprising is that the new Democratic platform promises to expand Social Security benefits. And while the Republican platform pays lip service to reforming Social Security, the party shows little interest in backing up its words with action.
Social Security will go broke in either case — it’s just a matter of when.
Do you want to drive off the cliff with the Dems at 100mph or with the Republicans at 60mph?
This profoundly matters for Millennials everywhere. While Social Security may seem like something that we don’t have to worry about just yet, the fact is that our futures get darker every day it isn’t reformed.
Here’s why. Social Security works by collecting money from current workers — us — to pay for benefits for today’s retirees. This was all well and good in 1940 when there were 160 workers per retiree. Now there are not even three workers to each retiree. That’s reflected in Idaho’s workforce, where in 2014 there were 660,600 people working compared to 306,264 Social Security beneficiaries — a ratio of 2.15 to one. That number is getting smaller, too.
The simple fact is that Social Security’s math no longer works, which means that Social Security is spending more money while taking in less. It is set to cost more than $900 billion this year and was the single largest part of the federal budget during 2015, with that cost growing every year. The most recently available data (2014) shows that in Idaho it pays out $365 million every month. The government now estimates it will go broke in 2034.
The obvious solution is to reform the program now, before it gets any worse. Once Social Security runs out of money, the only options will be to reduce benefits drastically or sock everyone in society — not just the rich — with higher taxes. On that note, Democrats claim we can cover the costs simply by raising payroll taxes, but that didn’t work the first 20 times Congress tried it.
Millennials are out of luck either way. We’re looking at getting little to nothing back after a lifetime of paying into the system, or a lifetime of smaller paychecks that prevent us from living life to the fullest.
This is a full-blown crisis. Doing nothing, per Republicans, is irresponsible. Vowing to expand the program, per Democrats, is delusional.
Millennials have the most at stake in this debate. We have to face the fact that Social Security is an unsustainable relic of a bygone era that threatens to take us down with it.
But it’s no different a “transfer the wealth” scheme from the young to the old than is ObamaCare. The President uses the money saved in medical expenses of the young to pay for the exorbitant medical expenses of the elderly. You cannot love the one and hate the other. They both work the same.
It’s time for lawmakers to bring Social Security into the 21st century. Technological advances have given our generation unprecedented control over our daily lives. Why should Social Security be any different?
Talk to any Millennial about what we want from benefits and in retirement, and you’ll probably hear the word “flexibility.” Mutual funds, IRAs, 401(k)s, and all kinds of modern retirement programs all provide exactly that, and they are accessible with just a few clicks.
Instead of being a monolithic, one-size-fits-all program, Social Security should be redesigned to give us the flexibility to instantly tailor it to our individual needs. This will never happen if Millennials don’t fight for it.
Right now, both Republicans and Democrats are letting a bad situation get even worse. We should reject their empty promises and demand a better deal — a deal that works for our generation, rather than against us.