Instructor Response
#1 How do we Pay for Retirement?
A lot of people expressing a "right" or "deserving" of money when you retire, which of course is a significant reason why Social Security exists; however, it is hard for us to really understand the depth of trouble in which this program now is, because of decades of under-funding and even now, almost complete lack of attention to solving its problems. As of 2013, 23.5% of US government expenditure is spent on Social Security, and it will continue to grow for another several decades. If unreformed, about 25% of SS expenditures from 2033-2086 will be unfunded.
Money will not be forthcoming to pay for social security from other programs. It is just too big. And, as I say, it is growing. If you count Social Security, Medicare, Medicaid, Veterans benefits and all "entitlements", which have been exempt from recent reductions in government, they count for 55% of government spending, and they are growing as a percentage of government expenditure, even as other programs are already shrinking.
What could be done? The Australian plan has attracted interest in some, but I'm sure it's obvious that a considerably larger forced-saving program in the US is unlikely to fly politically.
An option presented by President G.W. Bush was to reduce the "defined benefits" part of SS and replace it with a "defined contributions" part managed by each taxpayer. There is no interest in this since the stock market fall of 2008.
When SS was founded in 1933, the average at time of death was approx 64 -- in other words, less than half the population was expected to live long enough to get any retirement payment. Now women in the US live on average to age 80; men to 75 -- that's 10-15 years over retirement age on average, and still increasing. There were 10 workers for every retiree in the US in 1950, 5 in 1960; now there are 2.8; by 2050 there will be 2. We need to think about funding an underfunded & growing program.
Here is a plan from the Social Security Admin to pay for SS: http://www.ssa.gov/history/reports/ObamaFiscal/SocialSecurityProposals.pdf
It combines making payments required at a higher income than now, raising retirement age, raise the cap of wages covered somewhat, plus some other things -- not anything which seems earth-shattering. Take a look. The big issue: political will.
Student Response
#2 Retirement
Seeing as most of those who are retiring or are going to retire are remnants of the Baby-boomer generation, saying it's a "right" or they "deserve" money, in my opinion, is a bit absurd. Because the Baby-boomer generation were the ones who screwed up the economy, making life more difficult for those in the working middle/lower classes. So why do they "deserve" money? However, this biased response is simply the voice of a college student speaking on behalf of a few working-class members as well as members of Gen-Z and Millennials who have had to deal with rude behaviour from senior citizens.
However, whether or not they screwed things up for the rest of us, we should not forsake those in need and cease funding the special programs that help them. What we can do is find areas in which less money, or no money is needed (meaning that program can be terminated because it's no longer necessary) and redirect the funding towards other necessary programs.