Social Security's Finances, Past and Future: Echoes

When President Franklin D. Roosevelt created Social Security, Americans typically had more children, and died younger, than Americans today. As our demographics have changed, the balance of retirees to workers has shifted along with them. Lawmakers, as this chart shows, have not shifted the tax structure sufficiently to respond to this change.

The relationship between the amount workers pay into the Social Security system and the amount they receive as benefits is known as the replacement rate. The original American commitment was that Social Security payments to seniors should be correlated to some degree to the wages they had paid into the system, so that higher earners who had paid more in taxes would get somewhat more in retirement.