I spent the morning at the Youth Entitlements Summit on Capitol Hill, where 20-somethings quizzed economists about the future of Social Security, Medicare, and the financial security of our country. I left feeling like young people have a lot to worry about.
Not only are they facing one of the worst job markets right now, which means they're having trouble getting the early experience they need to build future careers, but they also seem likely to pay higher taxes and perhaps receive lower benefits from these entitlement programs. The Social Security trust fund, for example, is scheduled to run out in 2037. After that point, if no changes are made, there will only be enough money from tax revenue to pay about 75 cents for each dollar of scheduled benefits.
Rep. John C. Spratt, D-South Carolina, chairman of the House Budget Committee, warned that by the end of the year, the deficit could reach $1.trillion, and the economic recession is only exacerbating the situation. "We could be heading into a Japanese-like recovery, which is weak and slow," he said.
But in response to a question about whether young people might see their Social Security benefits cut, Spratt had a reassuring response. Political support for Social Security is so strong, he said, they even moderate cuts would be hard to make.
That differed a bit from the Cato Institute's Jagadeesh Gokhale's perspective, who warned that young people could one day find themselves trapped at the bottom of a vortex with all their juices sucked out, and then "you'll be spit out." In other words, no benefits will be forthcoming. Social Security might seem secure now, but that's only because when you're at the top of a vortex, all seems calm, he explained. The 20-somethings in the room responded to his metaphor with nervous laughter.
How worried are you about the future of Social Security? Do you think it will be there when you need it?