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The biggest political issue over the next fifteen years may be changing conditions that affect how much Social Security can pay.
This would include the decline in the ratio of those who are paying into the system to those collecting. Once this was as much was some forty-two to one. Today the ratio is down to about three to one. That ratio will probably fall further, which would likely require more cuts and higher taxes. Rachel Greszler complains that more tax increases, already pending in Congress, are the most likely solution.
Social Security’s problems are the classic problems of every government social “insurance” program (Social Security is nothing like an insurance company, which is tightly regulated and required to carry huge reserves, which can’t be loaned out for political reasons as Social Security surpluses have been).
For instance, the first generation of Social Security recipients tends to do very well. At the Social Security website there is the heartwarming story of Ida Mae Fuller. She got a great deal. She was the first recipient of Social Security. She paid a few dollars and ended up collecting tens of thousands of dollars over some thirty years (she lived to be 100).
But in the history of social insurance the second generation usually doesn’t do nearly as well as the first. After a generation or two, there are no more Ida Mae Fullers.
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