Visit the conference website and watch streaming video of the event. Reengineering Social Security in the New Economy , by Thomas F. Siems, January 23, 2001. Some commentators have gotten great publicity by doing just that. But close examination shows how irrational this exuberance is. Not enough workers equals not enough economic growth.
Faster growth means higher wages, and higher wages generate more tax revenue to pay benefits.
The truth is that, regardless of economic growth, Social Security promises more than it can pay. But income tax return data collected by the Congressional Budget Office show that 79 percent of income growth from 1993 to 1996 went to individuals earning more than the payroll tax ceiling. Baker and Weisbrot should know that, since their organization recently released a report decrying income inequality in the 1990s. But let's assume the future will be different. Economic growth will increase and most wage gains will go to people who earn less than the payroll tax salary ceiling.