Sunday, November 15, 2015

Social Security

Some people my age want the government to cancel social security immediately, not because it's too expensive, but because it's probably not going to be around when we retire in 30-40 years. It's unfair to us, if we have to pay a bunch of money for social security, when there isn't a reasonable chance for us to ever collect on that money.

Social security works, when the population is steadily increasing. That way, the amount of money going into the system is greater than the amount of money going out. But ever since the invention of birth control, the birth rate has gone down.

Japan is used as a prime example, since the majority of Japanese people have had less than two children, ever since 1975. As a result, that generation is smaller than the previous generation. Today, forty years later, they're dealing with the inevitable fallout. The elderly make of a third of the population, and the percentage of elderly non-workers is expected to increase in the future, because the average lifespan keeps going up. Social welfare keeps taking a larger and larger percentage of the government's budget, from 6% in the 70's to 18% in the 90's. To make matters worse for them, the government budget is expected to decrease, since there are fewer workers than before.

At some point, there is the very real possibility that Japan will give up and stop spending money on social welfare, because they can't afford it. More likely, though, they'll increase the minimum retirement age. That will help a little, but...well, their population crisis is expected to continue for the next eighty years, which is the average lifespan in their country. That's definitely a long-term problem.

The United States, on the other hand, is not Japan. Their birth rate has been steadily falling; ours has not. We went under the "two kids per family" average in 1973. But then the birth rate was above "two kids per family" from 1989 to 1994 and from 1999 to 2010. Those bumps in the birth rate means there are more taxpayers than expected, to help fund social security. Some people think that we're in the middle of another baby bump, but we'll have to wait until the 2020 census to know for sure.

There's also the fact that, unlike Japan, the United States has a large immigrant population. Immigrants, no matter what country they move to, tend to have more children than the natives do. That is helping to keep our population numbers high, and our population is increasing. Japan's population peaked in 2007, and has been going down ever since. We are a lot bigger than Japan, in terms of geography, too, so there is plenty of room for more population growth, although I suspect that the new populations will continue to flock to overcrowded cities, instead of filling in the large, empty parts of the country.

Obviously, we're still facing a potential crisis when all the baby boomers retire, and social security / medicare costs will go through the roof. But there are reasons to believe it's not as bad as it could be. But if you're really worried that nobody will be there to support you when you retire? You should ensure that doesn't happen, by having lots of kids.

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