Reengineering Social Security in the New Economy , by Thomas F. Siems, January 23, 2001. Executive Summary Retiring with financial dignity is in jeopardy. That is the direct result of Social Security's ever-expanding role in the economics of both retirees and workers. Compassionate in intent, but flawed in design, Social Security will prevent many from enjoying financial security in their later years. Unlike personal savings, pensions, and independent retirement accounts, all of which are stores of wealth, Social Security is a misguided political construct, wherein one's retirement benefits are dependent on the willingness of future workers to be taxed.
Benefits paid to present recipients are low.
Benefits to be paid to future recipients will be even lower. Worse, the legal requirement to pay Social Security taxes prevents workers from investing the money lost to those taxes in higher earning assets. Beyond that, the unsound financial foundation of the system virtually ensures that the promised benefits, low as they are, will be reduced even further. In the past, when Social Security's financial precariousness was addressed, the legislative response was to increase taxes and reduce benefits. Such responses not only failed to solve the problem, they exacerbated it.