a ponzi scheme pays early investors from the $ of later investors, & collapses when it runs out of investors.

SS pays retirees from the production of the next generation of workers, as the retirees paid for the previous generation.

It’s true that the ratio of workers to retirees is getting smaller, but that’s nothing new. at the turn of the century it was something like 32:1. Why didn’t the economy collapse when it went to 16:1, or 4:1?

Productivity. It takes fewer workers to produce the same amount of goods. Note that Japan & parts of europe are already at the 2:1 ratio, with no signs of a meltdown, no need for 80 hour weeks, etc. Because their economies produce double what they did 40 years ago.

The only problem with SS is the scare-mongering from the wizards of finance - you know, the ones who brought you the real estate bubble.

Frankly, I can see why younger people have thrown in the towel and adopted a live-for-today attitude. Why save? Taxes take your money and you just end up being one of the suckers, unless you are fortunate enough to be a really top earner and sock away serious dough.

Incidentally, talk of SS insolvency misses the real problem, which is that the inflow/outflow balance turns negative much much sooner. In fact it’s a problem as soon as net inflows begin to decline. Reason: the overall budget deficit will balloon as the annual SS surplus shrinks and turns negative.

There’s no really good solution, but there are things we could to that would at least own up to the problem. My suggestion: admit that SS has become a welfare system for seniors, and fund it from general tax revenues. Eliminate the FICA tax and the fiction that you have an “account”. Raise the overall tax rates to compensate. Tax all the benefits as regular income, a de-facto means test.

BTW the real ticking bomb is not SS but Medicare, which is exploding as I speak. Again, no really good solutions, but it could be swept up in a general makeover of the way we pay for healthcare. We pay more as a % of GDP than any industrialized country and with almost nothing to show for it in terms of measurable results. The employment-based system we have now is disfunctional because people without access to a group plan have trouble getting insurance if they’re not in perfect health, and there are big problems with portability. In short, insurance has reached the point where it is ceasing to serve it’s primary function as a means of spreading risk, and has become a means of dividing people into “tranches”. If you are “sub-prime”, you are toast. Time to replace it all by extending the medicare system to all citizens, and fund it through a tax that replaces what employers now pay to insurance companies.

Oh yeah while we are on it, there is nowhere you can go that doesn’t have this problem, unless it’s the developing world. So there’s the other dirty little secret - TPTB need to keep those illegals coming in because they are in general younger and helping shore up the demographics.