Social Security would work a lot better if it functioned like an actual insurance program, and that requires investment.
Social Security's flaw is that the population hasn't grown fast enough. That's why the government has repeatedly raised payroll taxes, which simply reduces your return. As it exists today, Social Security is a ponzi scheme; someone's going to get screwed, it's just a matter of who. Lifting the payroll tax of course results in an absolutely horrible return for a large number of people, and raises the top combined tax rate to over 50 percent.
The poverty line has always been a highly suspect measure of living conditions, as the poor today are better off than the middle class of ages past. Poverty among the elderly was caused primarily by low earnings during working years, which made it difficult to accumulate savings. This problem had lessened with rising prosperity, and the massive growth of private insurance, annuities, and pensions geared towards lower income workers.
I don't think the average lifespan has ever seriously declined. |