Current projections show that, if left alone, Social Security will begin having major shortfalls in funding before the end of the next decade, and that the program itself will need to change quite a bit, if it is to remain one of the federal governments primary responsibilities.
First, if we wish for Social Security to continue, the Constitution needs to be amended to make the program legal. The legality of Social Security is highly questionable, as Article 1 Section 8 does not give congress the power to provide pensions for Americans.
That said, I believe the best longterm solution for Social is to give American's more control over how their retirement is invested. To do this, the federal government would give Americans three choices:
1) Continue paying into the system in the traditional fashion, with the understanding that total pay-in or age of retirement may rise as a result.
2) Opt to direct how your Soc. Sec. funds are invested, using online tools similar to that of Scottrade.
3) Opt-out of the program entirely, and receive a dollar for dollar pay out for all that has been paid into the system.
Those wishing to remain in the traditional system can do so, and any projected shortfalls can be covered by selling off some of the $200 trillion of assets owned by the federal government. It may also be necessary to increase the total pay-in, raise the age of retirement, or both. Put simply, the current formula will not balance, because of the aging U.S. Population.
This solution is a win-win for all involved, as the traditional system beloved by many on the left, stays alive, and those wishing to invest their money in a wiser fashion will have the ability to do so. The fewer people in the traditional system, the less the overall liability, and the smaller the projected shortfalls become. The “pot” of money will grow, as more Americans invest their social security funds in the private market, helping us to further fund the program in the future. Furthermore, while this plan may not be totally inline with our founding document, it’s one big step in the right direction.