You mentioned at the time social security was implemented, average lifespan was 67 and now its 80. So why not raise the retirement age up to 70 and then progressively over time raise it higher to compensate for ever increasing lifespans? That would help a lot.
I agree with this, but it won't solve all the problems. For one thing, even though we are living longer, our ability to work longer isn't necessarily increasing at the same rate. IE, while you would take more people off of standard social security, you'd have a lot more ending up receiving it for disability as they get older.
Also, the productivity of elderly workers often, though not always, is going to be lower than the main work force, so one they'll have trouble staying employed longer and two they probably won't earn as much as they would before.
Plus, eventually people die. Our population is aging. With only internal growth, we could end up at a point where our workers are dieing off so fast that we end up with a large labor shortage. Of course, we could open the floodgates at that point, but it would be a rough transition.
Also, I believe we need to let all the young people who want to get out of social security and keep that extra money to get out of social security entirely and let them plan for their own retirement. That would help a lot too.
Well, a couple of problems with that (though I wish I could invest my portion myself!)
1) if you don't force people to keep it invested, many, if not most will just spend it and when they can't work anymore will simply end up on welfare.
2) If you let the young people opt out, the middle generation people are screwed. The trust fund isn't going to to cover their entitlements.
I do believe the government (and even private institutions) could do more to encourage and offer incentives for Americans to have kids. I think one problem is, many Americans are aware of the huge overpopulation problem some parts of the world is experiencing, they see the world becoming more and more crowded, so they feel they are doing the responsible thing by choosing not to have kids and not add to the overpopulation problem. There would have to be an effort to counter that line of thinking, and let Americans know that we need a higher birthrate in this country for the health of the economy.
The problem is simply that we have the inverse of the poverty trap. The poverty trap is that poor areas tend to have higher birth rates (partly because there isn't anything else to do!) and people begin having children at younger ages.
In developed countries, there is a natural drift towards having lower amounts of children as well as doing it later. I'm a prime example. My grand parents were poor immigrants, married by 18, had their first child at 20 and last at 30. My father didn't get married until after he was out of the army and halfway through college at 24, had his first kid at 26 and me at 30. I'm 32, just got married last year and probably won't have my first kid until I'm 34.
It's not that I'm worried about over population or anything (though I am), it's that I had other things to do besides settle down and start having kids. In fact, the only reason I've conceded to having a kid in the next two years is that while I don't feel quite ready to have one, I don't want to be trying to pay for college for my kids when I'm supposed to be entering retirement.
So, if the above things were implemented, then how many legal immigrants per year do you feel would be sufficient?
I can't say I have an exact answer to that. I will say this. We are getting about 1.2MM legal immigrants each year and about 1MM illegal, so a total of 2.2MM are coming into the US. With a population right about 300MM, that represents about a 0.7% population growth from immigration each year. Our population growth (which I think excludes immigration from the site I was looking at) is about 1%.
So the total population of the US is growing around 1.7% per year. Even with that (and granted many illegals do not stay permanently) we are projected to have an aging population over the next 50 years. So I would say that it needs to be more.
How much more? Well, even with a 0.7% growth in population from legal and illegal immigrants, we have had less than 5% national unemployment, which is a healthy number. Too low unemployment indicates an economy that has limited transferability of labor.
I would say, we probably need to add another million or so a year, though that is really a guess on my part. Obviously we should focus on skilled rather than unskilled (though those are needed as well), and we shouldn't just open the floodgates.