Participating in a discussion of sustaining Social Security generally leads people down certain paths. On the one hand we have reductions in benefits, on the other raising taxes. There are many proposed solutions I have heard, all of which boil down to doing one of these or both. One big problem, regardless of which solution you believe is best, is that any proposal is politically charged. This is an huge problem with creating any policy change, but it is turning catastrophic for Social Security. They knew it was a problem well over 20 years ago and now we are closer to the day of reckoning and nothing is being done.

Today I attended a presentation by John A. Turner where he discussed his paper “Autopilot: Self-Adjusting Mechanisms for Sustainable Retirement Systems.” Without going into too much detail, he explains the current usage of self-adjusting systems in other countries and how they are able to adapt to changes related to social insurance programs, ensuring their solvency. Social Security, being such a politically charged issue, would greatly benefit from a system where decisions were made automatically, for example, tied to life expectancy increases or decreases. The paper is a great resource to learn more about these adjustments, what is being done elsewhere, and how this can be applied to Social Security in the United States.

While this would be just a piece of the puzzle and could not solve all the political strife, it is certainly one that we need to bring to the table and hear more about. This is an approach we need to see more of, addressing the sustainability of the program as well as the political risk. With so much debate in Washington over what to do, politicians tend to postpone any difficult decisions. Can we have any action with the current political climate?

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