What's in Store for the 300 Millionth American?
October 17, 2006
DALLAS (October 17, 2006) — The 300 millionth American is expected to be born Tuesday. What does this new American have in store for him? According to Matt Moore, an expert with the National Center for Policy Analysis (NCPA), the new kid on the block faces a life of higher taxes than any American before him and a mounting financial burden.
"The 300 millionth American is in trouble," says Moore . "This poor tike is going to have pay for the irresponsible spending of the rest of us."
The 300 millionth American will retire at age 67 in the year 2073.
- Whereas life expectancy for someone retiring this year (born in 1940) is 69.6 years for a male and 75.7 years for a female, the 300 millionth American has a life expectancy of 80.6 years for a male or 84.5 years for a female.
- This means that at normal retirement age the 300 millionth American can expect to draw Social Security benefits for 13.6 years (male) or 17.5 (female).
- The year before this person retires, however, a whopping 43 percent of his or her income will go toward retirement programs.
- By the time he/she retires in 2073, an astonishing 90 percent of incomes taxes paid will go to support elderly entitlement programs — that's in addition to payroll taxes dedicated to Social Security and Medicare.
The reason for the higher tax burden? Our pay-as-you-go system of financing Social Security and Medicare benefits. In 1940 there were 42 workers paying into the Social Security system for every one retiree. That meant there were plenty of payroll tax revenues to pay monthly benefits. This year, however, there are slightly more than three active workers paying into the system for each retiree (a ratio of 3.3:1). By the time the 300 millionth American reaches normal retirement age under current law, the worker/retiree ratio will be slightly less than 2 to 1, meaning there will be only 2 workers to support each retiree by 2073!
"Unless the government makes drastic changes to Social Security and Medicare," warns Moore , "they are destined to swallow up the federal budget."