They admit in their latest trustees' report that by about 2011 Social Security will start running deficits. That may be an overly optimistic assessment. In four of the last six reports of the trustees, the number crunchers have had to fast-forward the date when Social Security starts losing money. It is said that demographics are destiny, and nowhere is that more true than in this retirement program. In 1950 there were 17 workers for every retired person.
Today there are three.
By 2030 there will be just two. That may be fine with Dick Gephardt, but it's liable to unleash generational warfare when the MTV generation learns the unhappy truth. William Shipman of State Street Global Advisors recently calculated the rate of return on Social Security taxes for today's young workers. For today's young workers Social Security isn't generational inequity. Conventional reforms, unfortunately, will only make the system a worse deal for young workers.