Here is a very good commentary on the annual report of the Social Security Trustees on the current surplus and future solvency of SS: Before you write that Social Security is bankrupt…. What is clear is that SS will run a surplus until at least 2033; and under its current construction have enough money to pay 75 percent of promised benefits. That doesn't sound like "broke" to me.
This commentary on the Trustees' report by the Center for Economic and Policy Research also makes the excellent point that, "The main reason that the program's finances have deteriorated relative to the projected path is that wage growth has not kept pace with the path projected." In other words, since the 1980s, U.S. wage growth, which is the source of SS financing, has been stagnant. And since Dubya's Great Recession, employment and wages have fallen further, causing a short-term shortfall in revenues.
But even better to read are the comments of learned readers on CEPR's site about the myth of SS's insolvency. Wrote one reader, Barkley Rosser, identifying himself as a teacher:
I also note that [my students] are being asked to support cuts now to their future benefits on the basis of the argument that if those are not cut now, they might have to be cut in the future. When that is posed to them, they also rather shake their heads in disbelief about how seriously this whole thing has been misrepresented to them.
Another reader, pete, repeated a point I've made several times that SS was never meant to be a pension system:
I would only add that the glut of Baby Boomers moving through the SS and Medicare/Medicaid system, like a golf ball through a garden hose, is a problem we have seen coming a long way off, at least since the 1980s. It's like one of those cheesy scenes in every action film where the hero shouts "Nooooooooooooooo!...", only slowed down to about 40 years. Enough. Even if all the Baby Boomers live to be 90, they'll all be dead by 2055. We just have to let the system gets back to demographic balance, and not dismantle and/or privatize one of the most successful anti-poverty programs ever designed out of fear of a hypothetical. And it is certainly not the fault of the young that Social Security is the main source of income for most present retirees, aka those "affluent" and "responsible" ones who preach to us about the need to live within our means.Most critical is, as skepto is suggesting, to completely end the facade of framing SS as a defined benefits program (it is not, you can read this in your annual statement), and simply re-frame it as old age and disability insurance, with some base levels and trickling off for the wealthy (a SS Buffet rule). That was the original intent, only modified to bring in the Republicans in the 30s, while ignoring demographics. Then the funding can be done optimally, rather than fraudulently confounding the benefits with the payroll deductions.