Social Security

CATO Institute - Retirement Trendsetter

Germany introduced Social Security in 1889; we followed suit 46 years later. Germany pays retirees' benefits by taxing its workers. So do we. Because of increasing lifespans and declining birthrates, the number of German workers has been shrinking relative to elderly beneficiaries. The same has happened here.

Germany's response has been to increase workers' taxes and decrease retirees' benefits. We've done the same. These government responses have not solved the problem in Germany, nor have they here. And now the German Conservatives and Social Democrats have agreed to a major, and new, reform of their Social Security system: Raise taxes further and cut benefits more. Will America follow once again?