But it could use a few adjustments. Andrew Tobias offers his, illustrating among other things how minimal the fix is.
My tweaks: (1) I’d keep 62 as the age for early retirement. But, where currently the full-benefits retirement age rises one month per year to 67 in 2027, I would let it keep rising to 68 in 2039. (Hey: “Seventy is the new fifty-five.”) (2) Where the 6.2% tax rate you and your employer each pay drops to zero on wages above a certain cap, I’d have it drop to 1% instead. Annoying, but not a killer. (And worth paying so that grandma – much as we love her – doesn’t have to move in.) (3) I’d keep raising benefits with inflation. But for higher-income recipients, I’d calculate those benefits based on price inflation, not wage inflation, in years when prices rose slower than wages. Bang: you’re done. A bit of pain around the edges, with plenty of time to prepare for it, and the Social Security problem is solved.]
But, as they point out over at AlterNet, there’s no crisis and no hurry:
To say that Social Security’s surplus “has been spent,” is like saying that when you buy a U.S. government bond, your money “has been spent.” Whatever has been done with the money, you are still holding a bond, and you will get your interest and principal so long as there is a US government. If there is no US government when you retire, well then you will have other things to worry about than Social Security, including your private savings.
…In fact, even if nothing were ever done to close the projected gap – and that is a wildly implausible scenario – Social Security would, after 2046 still have enough money to pay, indefinitely, a bigger benefit than it does today. That’s in real terms, adjusted for inflation. Of course, this benefit would be less than what seniors in the distant future would be entitled to, so we will eventually make some adjustments. But there’s no hurry.
Certain people in our society hate social security. For the past 20 years they’ve spun a tale about the looming crisis. It’s bullshit. And, unfortunately, even Barack Obama, has been drinking their Kool Aid.
Medicare and Medicaid, now those, on the other hand, are serious matters.
Read Krugman