The Times has an article today arguing that Social security is in worse shape than we know, because the actuaries at SSA don't have a good grasp on demographics. The authors present a lot of graphs and seem rather convincing.
However, I've my own theory, based on simple economics, so it's probably wrong.
Everyone points to the facts that the baby boomers are getting older, and mostly they're living longer, while the working population is not increasing as fast. The result is each geezer dependent is and will be supported by fewer workers, meaning the taxes on the workers will have to go up to provide the pensions the geezers have been promised. That seems sound logic.
But, the geezers don't and won't live on their pensions, not on paper money, they will live on bread and butter and real things, produced by real people during the days and months they're living. So what happens? If I understand economics, when the supply (produced by workers) gets small, and the demand (from geezers with fat pensions) is large, the effect will be to boost the wages of the workers. That should bring more workers into the system, whether by geezers finding it rewarding to work longer or to work parttime, or by workers having two jobs and working overtime, or by immigrants coming into the country.
The one problem I see is the indexing of pensions for inflation, because this process of adjusting the economy would go a lot faster if the pensions weren't indexed. Perhaps the alternative will be for workers to be paid in intangible benefits, stuff which benefits them and makes work more attractive but which doesn't get reflected in the cost of living indexes. Is that what's happening in Silicon Valley, with all the fringe benefits?
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