It is worth noting what Social Security is and isn’t. What it is is a system in which 12% of every paycheck we get is deducted and handed to the Federal Government. This goes to pay the salaries of some 60,000 Social Security employees, who at some point will give you some of your money back–if you live long enough–and additional money taken from current receipts from your children and grandchildren. Many people contribute their entire lives, and never get anything back; many people, who live long lives, get back much more than they put in; and people retire independently wealthy get money regardless of whether or not they need it.
Social Security is not, in design, a wealth redistribution scheme. Yet, in practice, it is, but not in a rational way (I will bracket for now whether such schemes are morally defensible in the first place). What happens is that Congress periodically votes increases in the Social Security benefits that have not been paid in by the generation drawing them. You were getting $600/month, now you get $800/month. Where does the money come from? We borrow much of it, and the rest comes from the 12% taken from the checks of following generations.
It is not rational, because every generation the expenditures go up, without any expectation that our economy will grow sufficiently that our kids and grandkids will be able to meet the burden. Payments go up because it is politically convenient, primarily but not exclusively for Democrats, to pretend that this can go on forever. To paraphrase Keynes: “in the long run, we will no longer be in office”.
Medicare is roughly 3% of your check. The way Medicare works is that money is taken out of your check, used in part to pay for the 64,000 Health and Human Services employees, and your contributions grant you access to government funded healthcare when you reach a certain age. Self evidently, they don’t pay for everything, but they pay for a lot.
The simple reality is that when you get older you get sicker. This is inevitable. We all die, and most of us die of something that plagued us for some period of time before killing us.
In the past several decades, all sorts of medical treatments have come about that do not really have a significant effect on life expectancy–which is mainly tied to your diet and lifestyles choices–but which do something, and which people therefore consume. Medicare pays for much of this.
One way to think of this is that the cost of medical care has inflated because there are more things you can spend your money on. If a store offers only hot dogs and ice cream, they will only sell to people who like those things. If they instead offer every type of food under the sun–Italian, Indian, Moroccan, Mexican, German, Chinese–then more people will go in there. As more people go in there, they expand. This is all that has happened with healthcare costs, which have gone up a LOT without much decrease in mortality. Stupid people, who do not understand basic economics, blame this on profiteering, as if such an explanation were tenable in a free market.
So the cost of Medicare keeps going up, too. Again, the increase in costs is delayed and deferred, not paid. HHS is roughly 25% of Federal outlays. Think about that. We have funded a massive insurance complex that does not even remotely pay for itself, which does not ask people if they can afford to pay for their own healthcare, and which keeps ballooning benefits by borrowing money from creditors, and from future generations, who will inherit a bankrupt nation in the not-too-distant future.
To this must be added demographics. Put simply, there will soon be a lot more old people than young people. The Baby Boom was just that: an explosive rise in birth rates, that followed WW2 and ended about 1960 or so.
On our current path, if we keep offering the benefits we have been offering to a pool of people that will keep growing and growing for several decades to come, the total benefits paid out will cause major harm to our economy, and likely a general impoverishment that is preventable and unnecessary.
I like to pretend from time to time that conservative economists have called things largely correctly, and that we actually do live in a nation with free markets. Compared to many other nations, this is true, but the simple reality is that no nation in history has had what I would label a proper monetary policy.
Monetary policy is where people glaze over and stop paying attention. The simple reality, though, is that we could have our cake and eat it too, if we were not being robbed blind by the monetary cartel.
Put simply, if we had a rational money system, we would not need Social Security, or Medicare, because we would eliminate poverty in short order. The simple reality is that many people benefit from the current system. There are many who want poverty and (generally alleged) racism to continue, because it puts money in their pockets. You can impoverish a nation, but that effect will never include everyone.
Further, of course, the masters of money benefit hugely from the status quo. It is not so much that they use poverty to amass their own wealth–few understand what they do, so there is no need to lie cynically about it–as that they are heartless bastards who could care less about the effects of their greed on the world at large. Too much is never enough.
My treatment of monetary policy is here: http://www.goodnessmovement.com/Page14.html