American Youth Wrongly Expect Nothing from Social Security
By Jeremy Weltmer • Tuesday, July 20, 2010 2:01 pm
As a USA Today/Gallup poll reported this morning, “Three-fourths of those 18 to 34 don't expect to get a Social Security check when they retire.” Thankfully, those 3 out of 4 young adults have too dire an outlook.
The article later asserted, “Last year, [the Social Security actuaries] projected the system would begin running in the red in 2016, as the Baby Boom generation retired, and the trust fund would be exhausted in 2037.”
But however much Social Security must be subsidized by the Federal government, lawmakers would never allow those promises to lapse for reasons of expediency. What is much more likely to occur is a general reduction of benefits over time such that Social Security pays for itself with small subsidies.
Of course, this strips away the entire point of Social Security: the reason to invest throughout life is so that the balances grow and compound over time rather than simply stuffing the money in a mattress. As Social Security simply becomes a transfer payment from the young to the old, benefit levels will drop correspondingly as the money has no chance to grow.
Today’s young adults will indeed one day receive checks from Social Security, but when those checks come, the recipients will only be able to laugh at the pitiably small amounts. The Social Security of today will be the latte-subsidy of tomorrow.
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