The editors of Bloomberg are worried about Social Security:
Washington seems determined to ignore the country’s rapidly worsening fiscal picture, but sooner or later policymakers will be forced to pay attention. When they do, they’ll find that changes to Social Security are unavoidable.
No doubt, any such effort will meet strong political resistance. That’s why nothing has been done for 40 years and counting. The best approach — on the merits and as a matter of political feasibility — would combine entitlement reform with fresh thinking about financial security in retirement.
They propose a combination of raising the Social Security Retirement Age and mandatory savings. I don’t believe they’ve thought the issue through. I have no problem with increasing the SSRA as has been intended all along but I think their proposal does not raise it high enough (I’m far over SSRA myself). But I think they will find that mandatory savings has a disastrous effect on the U. S. economy.
If it were still 1983 (the last time we reformed Social Security) it wouldn’t be so bad. But personal consumption expenditures have increased as a percentage of GDP since then:
They don’t really get to the crux of our problem which is that over the last 40 years the percentage of income subject to Social Security withholding has declined precipitously.

Said another way: The top 1% of income earners hold a far larger proportion of total income than they did forty years ago (even more than 50 years ago) and very little of their wages not to mention earnings are subject to Social Security. There’s more than one way of accomplishing that: either increase FICA max faster or ensure that more people earn more.
In other words I don’t think our problem is that people are retiring too early or that they aren’t saving enough but that there are too many low income earners relative to the total population and not nearly enough people earning near FICA max ($160,200 this year). That’s not an accident. It’s what happens when you maximize the number of minimum wage jobs which has been the objective of policy since the end of World War II. It’s perverse but that’s how politiians keep score.






