Why is the Social Security system in crisis at a time when it's running large surpluses? What's the source of the problem? What solutions have been proposed?

What will be an ideal response?


The Social Security system is in a crisis even though it's running large surpluses because its surpluses will turn to large deficits within the next 20 years. The source of the problem is that the baby-boom generation will begin to retire, greatly increasing the Social Security benefits that will be paid out. Potential solutions include reducing benefits, increasing taxes, or getting a higher return for the Social Security trust fund by investing in the stock market.

Economics

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