Veronique de Rugy spells out exactly why Social Security is unsustainable:
A single man earning the average wage ($43,500 in 2011) who retired in 1980 would have paid a total of $96,000 in Social Security taxes and received lifetime benefits of $203,000, or about 211 percent of contributions. A single man earning the average wage but retiring in 2010 faces a vastly different situation: He would have paid $294,000 in taxes to receive benefits of just $265,000, or about 90 percent of contributions. For the same person retiring in 2030, taxes of $398,000 yield $336,000 in benefits, or just 84 percent of contributions.
These numbers were found, according to de Rugy, “C. Eugene Steuerle and Stephanie Rennae, researchers at the liberal Urban Institute.” (Readers may remember Tea Party Patriots examined a report on the federal budget co-authored by Steuerle earlier this year.) Clearly, this system is both unsustainable – the Trust Fund for Social Security is projected to be empty in the near future – and not a good investment for retirees.
What happens if you combine Medicare benefits with Social Security benefits? The disparity between taxes and benefits for single men and women in 1960, 1980, 2010, 2020, and 2030 are enormous, according to Steuerle and Caleb Quakenbush:
There you have it. The 15.3% of your income that goes to your Medicare and Social Security retirement benefits is to not be around for much longer without changes, but they’re going to keep paying you less and less per dollar of forced investment. The only way out of this death spiral is aggressive reform.
Oh, and the life of these programs? Amnesty will shorten this already bleak life expectancy.