Crisis
(from Students for Saving Social Security)

The Crisis is Now
 
The shortfall in Social Security’s funding is not merely a distant crisis only concerning our retirement.
 
Each annual delay of Social Security reform costs the United States between $150 and $600 billion. Some politicians and interest groups would like our generation to believe that we can wait to reform Social Security until 2041 because only then will the trust fund be depleted. As President Clinton explained, however, the trust fund is “available to finance future benefit payments…but only in a bookkeeping sense.” All money in the trust fund has been spent. The only assets in the trust fund are IOUs the government has written to itself. In order to redeem these IOUs, the government will be forced to raise taxes, increase borrowing, or reduce spending. Unless there is reform, this will happen within a few short years.
 
Jobs and Salaries Will Be Hurt
 
Without personal accounts, payroll taxes will have to be raised by as much as 50%. Jobs will disappear and salaries will shrink.
 
If payroll taxes are increased national unemployment – which disproportionately affects young people - will increase and salaries – beginning with those of entry-level workers - will shrink. Because of the increased cost of adding new employees, our generation is sure to suffer more than any other immediately upon entering the workforce. Companies will have to limit the number of new workers they hire and may have to fire existing employees. This downturn in the job market will affect us more than any other group as we will be the least experienced candidates in a more competitive job market.
 
Economic Growth Will Slow
 
Unreformed Social Security will handicap economic growth and prosperity for decades to come.
 
Increasing payroll taxes will further harm investment, productivity, wages, and overall employment. This gloomy economic outlook will prevent our generation from enjoying the great gains in wealth creation that were possible for our parent’s generation. This problem is not distant. Rather, our generation is sure to suffer the consequences of political delay immediately open entering the job market, and could happen this year if Washington’s opponents of reform get their way.

Solution
 
Don’t increase the tax burden on entry-level workers
 
Raising the payroll tax will hurt jobs and salaries for our generation.
 
Raising Social Security taxes now - just as we are entering the workplace - limits employer’s ability to hire us, handicaps our ability to save for our future, and stunts the economic growth and prosperity of our future. Social Security taxes have already been raised 30 times since the program’s inception; another round of burdensome tax increases will merely delay the problem.
 
Personal ownership
 
Without personal accounts, our generation will only be able to receive Social Security benefits if payroll taxes are increased by 50% or if current Social Security benefits are cut by over 25%.
 
If personal accounts are introduced, payroll taxes do will not have to be increased and benefits will not have to be cut. In addition, personal accounts provide a permanent solution to Social Security by creating a personal retirement lockbox for every worker. Without personal accounts, our generation has no legal rights to Social Security benefits. Instead of offering our generation spent promises, Social Security reform could provide us with our first assets in an ownership society. We want property not promises!