Social Security gap is mostly about fertility
We journalists got a gentle chiding today from Stephen Goss, chief actuary of the Social Security Administration. If you’re going to talk about a problem, it’s important to define it correctly, and we seem to spend a lot of time talking about the aging of the Baby Boomers and about Americans’ longer life expectancy. Those things do affect Social Security’s long-term solvency, but they’re dwarfed by a third factor: The sharp decrease in the birth rate since the mid-1960s. Says Goss:
The real story of the Baby Boom is not that it happened but that it stopped.
During the Baby Boom, the average American woman had 3.3 children between ages 14 and 49. Now, that’s down to 2.1 children. As the large Boomer generation moves into retirement by 2030, we’ll have about 1 retiree for every two working Americans, up from a more than 1-to-3 ratio now. After 2030, longer life expectancy will continue to change that dependency ratio, Goss says, but the big shift is all about birth rates.
Here’s the dependency ratio in graphic form, from the 2009 Social Security Trustees’ Report. The vertical axis is the number of active workers per Social Security recipient.
Goss didn’t endorse any specific policy prescriptions, but he tell a National Press Foundation audience that the policy debate might be affected by how people frame the problem:
Remember, our big change in the program is not about people living longer, which might lead you to say we should work longer. It’s about fewer kids being born.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
The solution to the problem is NOT to have more children or immigrants, because that will only make the problem greater when THEY reach retirement age. It is physically impossible for population to grow indefinitely, and the sooner that population growth stops (or even reverses) the more resources there will be per capita to sustain a high standard of living.
The long-term solution is (1) for workers to be more productive, through capital investment in USEFUL education and in “hardware” including renewable energy, and (2) for workers to work longer in life, thereby sustaining the ratio of workers to retirees.
Bollocks.
The “gap” has as much to do with stagnating income than any “fertility” factor.
When productivity rises, and when pay rises with it, an active worker pays more Social Security tax and can support more retirees.
Somehow we have bought into the conservative idea that gains in productivity must be, er, CONSERVED for the wealthy - whose FICA contributions, by the way, are capped.
Step one: Lift the cap. Or at least raise it. That way every gain in worker productivity helps support the system.