Let Big Business Fix Social Security
Fortune Magazine
12/8/97
Newspapers lately have been full of good tidings about the U.S. budget and the happy prospect of budget surpluses. But as countless economists and public-policy experts warn us, the nation is headed for another huge budget crisis in the not-so-distant future when the Social Security system starts running out of money.
By 2015, the money being paid out by Social Security will be $57 billion more than its income. If nothing is done about this problem, the ever-escalating deficits will total an astounding $160 trillion through 2075.
The reasons for this dramatic change are that Social Security used to be supported by 30 workers for every retiree, and more than 40% of the potential beneficiaries died before collecting their first check. However, when the baby boomers begin retiring, there will be only two workers supporting every retiree, and each retiree is likely to live longer.
Several solutions have been suggested, but none are particularly attractive. The best solution would be to switch to a private pension or retirement system in which people could invest their own money for their own retirement.