We continued our conversation on the changing economy, discussing how demographics have shifted and how some systems, like Medicare and Social Security, might need to be reformed in order to adapt to the new economy.
Lim, a principal at the District Economics Group, said that the current method of financing Social Security is not necessarily something we would use today if we were starting from scratch. Financing the system is too limited to the traditional employment relationship and was setup at a time when the nature of the employer-employee relationship was different, she said.
Lim added: “If we were to make a bolder reform … we would change how we collect the revenue … the benefits would be tied to an individual’s income levels more directly and … the kinds of services they need in old age and retirement.”
Social Security is not the only benefit tied to the traditional employment relationship, health care and private retirement savings are too, she said.
Hear more on “Facing the Future.” I host the program each week on WKXL, NHTalkRadio.com (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders, elected officials and candidates for public office. Past broadcasts are available here. You can now subscribe to the podcast on iTunes, Google Play or through RSS.