This is a great argument for individual retirement accounts rather than using the young to pay for the elderly. In the United States, if everyone's social security tax were put in an index fund, then everyone would be millionaires upon retirement.

There are solutions other than pleading with people to have more kids.

While I'm skeptical of the current state of Social Security, this doesn't quite work. The dollars in your account are useful only to the extent that there is stuff being produced that you can buy with them. If your population is mostly retired people, there's not going to be much stuff and prices will be bid up rapidly. So great, there's $10 million in your private account, unfortunately your home nurse costs $2 million a year.

Numbers in a database, whether they are in the millions or billions or trillions, don’t mean anything unless there are sufficient things/services to buy.

I think you also generally need an exponentially increasing supply of working people in order for the economy to grow exponentially.

The idea behind OASDI (Old Age, Survivors, and Disability Insurance), more commonly known as Social Security, is not that you retire a millionaire.

It's the US government saying "since we are a wealthy nation, we will not let you spend your elderly years destitute."

That's it. That's literally all it is. It was meant to keep grandpa from being a burden on his family when he was too old to work, which in the 1930s meant when you were too old to do actual physical labor.

Since then the American public has seen it as a nice little bonus they get for living past 65 and has started stealing from younger generations in the form of sovereign debt in order to maintain that instead of treating it like the insurance policy it actually is.

==Since then the American public has seen it as a nice little bonus they get for living past 65 and has started stealing from younger generations in the form of sovereign debt in order to maintain that instead of treating it like the insurance policy it actually is.==

Social Security has it's own funding stream, a tax on wages earned. It does not add to the deficit or increase borrowing. If the funding dries up, the benefits are reduced. This is the Social Security cliff we hear about all the time.

But there's only so many dollars you can pull from a wage earned. A dollar pulled for OASDI is a dollar that can't be pulled for anything else, and the person earning said dollar will express dissatisfaction at the ballot box if you try to make up for that by taking another dollar.

A retirement bonus (which is what OASDI is for millions of retired Americans) costs more than a retirement insurance plan, because one gets drawn from by everyone, while the other can simply be denied if it isn't strictly necessary for the person trying to collect the benefit.

A more expensive program requires more tax revenue to administer, revenue that could be used on anything else. Since we haven't had a real national discussion about federal taxes in 30+ years in the US, we now take the spending that would be funded with the tax revenues that could be freed up by a less-expensive implementation of retirement insurance - one that's treated as actual insurance - and instead fund it with deficit spending.

==A more expensive program requires more tax revenue to administer, revenue that could be used on anything else.==

More complexity is what makes programs more expensive to administer, not size. You are suggesting adding significant complexity (actual insurance) to what is currently a relatively simple program.

There are lots of things that make it more complex. For example, actual insurance requires you to continue paying in each year to get a benefit. Currently, I can take a year off from working and it has minimal impact on my SSI benefits (as SSI just takes and average index of your 35 highest earning years).

In the end, it is a matter of the amount of labor done by the future generation to support the previous one, vs the amount they do for themselves, right? I mean, we can account for it however we want, but if every elderly person was a millionaire, I guess we’d just have… very high demand for the types of doctors that serve the elderly.

The money doesn’t take care of people, people paid by the money do.

I do already put money into a 401k. I will likely be a millionaire before retirement, assuming no major catastrophes and steady employment in jobs that pay at a similar level (adjusted for inflation) before then.

I don't know if the same would be true for most people, though (I make significantly more than the average household income -- although probably less than a lot of people here because I'm not making Silicon Valley money -- and I don't have children).

It's an interesting idea worth exploring, but I'm not sure if just switching social security money to retirement accounts would be sufficient.

Administration and making sure people don't dig into them before retirement would potentially be very expensive too (although to be fair, I'm sure Social Security administration costs are very high also).

Are you aware of any studies that analyze such a solution? I imagine there must be something out there.

every social safety net in every country needs to be funded somehow and a shrinking population means more debt to take on or higher taxes on existing workers. nothing is free.

Yeah that was kind of my point. That's why it's better if there are more younger people to contribute than elderly people. If there's less, then the burder is greater on individuals.