The Graying of America

Of the total federal expenditures in 1995, Social Security together with
Medicare(federally founded health program aimed at helping the elderly, founded
in 1965) was the largest, accounting for about 34 percent. In 2005 this figure
is predicted to be as high as 39 percent. This is caused by the "graying" of
America and the increased number of elderly who will collect benefits for a
longer portion of their lives, coupled with a reduction of the number of workers
available to pay for their benefits. Increasing costs of living and higher
standards of living (as reflected in higher wages) also are consequences.

In short, if no action is taken in the interim, by approximately 2013 the
federal government will have to raise taxes, increase the debt, print more money,
reduce Social Security benefits immediately, or do some combination of those
things to rectify the Social Security cash-flow imbalance. The surplus will be
gone. The amounts needed by the Social Security system, even in the early years,
are not insignificant. In 2015 experts believe that the government will have to
find approximately $57 billion to meet its obligations. By 2020 the number will
have grown to $232 billion.

The demographic makeup of America is changing. The share of the population over
the age of 65 will continue to grow well into the next century. Today,
approximately 13 percent of the population of the United States is over age 65.
By 2030 that percentage will increase to more than 20 percent. Even more
surprising, in less than 50 years, there will be as many Americans aged 80 and
older as there are now people over 65.

People are also living longer; In 1900 life expectancy was 47 at birth, and if
you lived to be 65, your life expectancy was suddenly 77. In 1993 it was 76 at
birth and 82 if you turned 65. At the same time, retirement ages have sunken. So
suddenly there were people living longer, on the government\'s payroll. Some
people would then draw the conclusion: "If people live longer, they should work
longer," but many elderly people are too tired, and to weak too work after a
life span of just working.

As the "baby-boom" generation begins retiring, around 2010, America will have a
greater proportion of elderly citizens than it ever has. Approximately 24
million people over the age of 70 live in the United States today. By the year
2030, twice as many - 48 million - will be alive. And spending on the elderly
now accounts for one-third of the federal budget (34%) and more than one-half of
all federal domestic spending other than interest. As the group makes up more
and more of the population, its visibility and political influence will probably
intensify.

The situation is caused by an increasing number of retiring Americans, the fact
is that we are now living a great deal longer than did our grandparents. The
makers of the Social Security system designed it with their present life spans
in mind. When they created the program in 1935 and chose 65 as the retirement
age, the average life expectancy of a child born in that year was only 61. Today,
the average life expectancy is 76 years, and by 2030 it is expected to approach
80 years of age. As increasing numbers of Americans claim Social Security
benefits and do so for a much longer period of time than was originally planned,
and as fewer workers are available to support those transfer payments, the
strain on the Social Security system threatens to rip the program apart.

This dramatic rise in the number of elderly American citizens will stress the
Social Security System as well as other organisations designed to assist the
elderly. Experts project that soon after the year 2000, the federal government
will have to take serious steps to insure the continuation of the Social
Security program: reduction of payments, taxation of benefits, an increase in
the age at which people become eligible, or some combination of these strategies.
If steps are not taken, not only are there increasing numbers of elderly people
in the United States, but their life expectancies are increasing as well. Life
expectancy at birth and at age 65 is increasing for both sexes. This means that
Americans will be living longer in their elderly stage and will require a larger
amount of money to support themselves after retirement.

This can be seen by theses figures. In the 1950s there were approximately eight
working-age Americans for every person over 65 years old. By 2030, there will be
just two working-age Americans for