Benjamin M. Friedman
Social Security is probably the most successful government program in the United States, and certainly the one most highly valued by the American public. It is also among the most threatened. Today most Americans understand that Social Security cannot continue indefinitely to pay benefits at current levels and according to current rules unless payroll taxes rise sharply. And most Americans strongly oppose significant increases in payroll taxes.
There is no secret about what has brought Social Security to this impasse. The combination of a "baby boom" following World War II and a "baby bust" a generation later created an imbalance in the American population's age structure that is now steadily reducing the number of active workers contributing to Social Security compared to the number of retirees drawing benefits. This effect is temporary, but even so it will last for decades and the problem it creates is now only beginning. At the same time, pervasive changes in medical science, in health care, and in personal health habits have significantly raised life expectancies, and therefore the number of years over which the average