Social Security Viability

It's a common theme of the right that Social Security will collapse if we don't do something to cut back on the terrible problem of giving money to people who earned it.  The right have been fighting Social Security since it was first proposed (although a few Republicans did vote for it in 1935), and many have been trying to privatize it ever since.  Just last night, Paul Ryan claimed that "Social Security [is] going bankrupt.  These are indisputable facts".  Well, no. Social Security is fully funded for at least another 25 years if we do nothing.  But there are some trivial things we can do to make it viable for much longer.  For example, raising the contribution cap can bring in a lot of money: if the cap were eliminated entirely, it'd bring in about $130B a year, enough to pay $6K a year to every beneficiary, or add about 50 years to the viability of the trust fund.  (current revenues are about $500B) The people who would be paying, for the most part, don't really need social security, nor is the cost a big part of their income. That they don't need it is often used as an excuse for them to not pay, and a rationale for "means testing", meaning they wouldn't be eligible.  This is wrongheaded.  There's a big group who need social security a little bit.  Although they have other income, SS helps them.  This group is the largest share of the contributors.

So how is it that the supposed actuarial problems of dramatically increasing life expectancy and the baby boom are not eating up the entire trust fund?  Well, they are, a little.  But only a little.  It turns out that life expectancy increases have taken place in two broad areas:  firstly that life expectancy for children is dramatically higher than it was in 1935.    This actually adds to the labor force.  It means that all those kids who were dying of whooping cough, smallpox, polio and all the rest, aren't anymore, and are are helping to pay for it all.  Life expectancy for oldsters has gone up too--but not much. The demographic that matters: average life expectancy of a 65 year old has increased from about 14 to 18 years.  This is a lot of new seniors for sure: in 1935 there were about 8 million people over 65, and today there are about 40 million: a factor of 5.  but wait:  there were fewer than 30M people paying payroll tax in 1935, but today there are almost 150M--coincidentally a factor of 5.  So it all balances.