Reengineering Social Security in the New Economy , by Thomas F. Siems, January 23, 2001. For more than six decades it has protected our elderly against poverty and assured young people of a more secure future. Yet, it has been apparent for many years that Social Security, itself, is becoming insecure. Social Security was designed for an era when few Americans lived much past the age of 65, and when families of three or four children were more than the exception. When Social Security was created there was about 40 workers paying Social Security taxes for every one retiree receiving benefits.
Long life is a blessing.
Smaller families are an individual choice. But the consequence of this blessing and this choice is that the Social Security payroll tax, which was once 2 percent, has now passed 12 percent. Economists calculate that it will have to rise past 18 percent if the baby boomers are to receive the same benefits that Social Security has promised, unless we take steps soon to reform the way Social Security is financed. The threat to the stability of Social Security has been apparent for decades. For years, political leaders have agreed that something must be done.