Social security might become thing of past
February 13, 1990
Anyone born 1945 to the present might not be able to collect social security benefits.
Diane Rzeszewski, NIU political science instructor, said “baby boomers,” a generation of babies born within five years after World War II, will affect future social security benefits.
Rzeszewski said baby boomers are the fastest growing section of the population and the social security system has never faced a problem like this.
“The system must accumulate a lot of money to avoid this problem,” Rzeszewski said.
The federal tax rate will be significantly higher and the surplus money accumulated during the past should be put aside for the future, she said.
American workers give 6.2 percent of social security taxes that is used to support retired workers, according to an article from The Chicago Tribune.
Social Security estimates the Federal Insurance Contributions Act (FICA) taxes will collect about $320 billion and use about $250 billion, the article said.
DeKalb Mayor Greg Sparrow said the surplus is being borrowed by the government to buy treasury bonds, bills and letters to reduce the national deficit.
Sparrow said, in order to have enough money for the baby boom generation without a tax burden in the future, a gradual increase of taxes will generate the surplus able to support the baby boomers.
Sparrow said President Bush is not using the surplus correctly.
Instead of using it to rehabilitate highways, public transportation, clean air and airports, Bush is spending it for defense, foreign aid, space and education, he said.
Sparrow said the United States has no financial strength to help ourselves, let alone other countries.
The social security affects the middle and lower income workers more than it does the rich because the tax rate does not rise with the income.
Sen. Daniel Patrick Moynihan proposed cutting the FICA tax by $55 billion and prevent the surplus from reducing the federal deficit.
NIU Economics Instructor Judy Temple said the baby boomers are now working and paying taxes to support retired workers.
By the time the boomers are able to retire and receive benefits, a younger generation might have to pay more taxes to support them, Temple said.
Statistics show in 1950, every 7.2 workers supported a retired worker, she said. In the year 2000, 4.6 workers will support one retiree and in 2060, 2.4 workers will support one retired person, she said.
NIU Economics Professor Ted Newman said the birth rate is going up and the laws allowing people into the country will help social security problems.
He also said, instead of retiring, the government is encouraging senior citizens to work, such as helping to build houses and producing food.