Social Security's Treatment of Postwar Americans: How Bad Can It Get?

The authors consider Social Security’s treatment of postwar Americans under alternative tax increases and benefit cuts that would help bring the system’s finances into present-value balance. The alternatives include immediate tax increases, eliminating the ceiling on taxable payroll, immediate and sustained benefit cuts, raising the system’s normal retirement age, switching from wage to price indexing in calculating benefits, and limiting the price indexing of benefits. The choices made among these and other alternatives have important consequences for which postwar generations (and which of their members) will be forced to pay for the system’s long-term financing problems.