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Social security for retirees is paid through payroll taxes on the current workforce. However, because retirees are living longer and increasing in number, the inflow of payroll tax revenue from workers at some point will be insufficient to fund the outflow of social security payments. One solution to the problem would be to increase taxes on workers. Another solution would be to reduce retiree benefits and require workers to wait longer before they become eligible for social security benefits (the earliest eligibility is currently 62 years of age). If you were asked to solve the problem, what would you propose?

 

Optional: Describe the differences between demand-side policy and supply-side policy. Which one do you prefer and why?

 

  

Must be at least 200 words with citations and references 

 
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