The Congressional Budget Office projects that Social Security spending

The Congressional Budget Office projects that Social Security spending will rise from 5% of GDP to 6% over the next four decades. Why is that a problem?

What will be an ideal response?

ANSWER

The dependency ratio — the ratio of benefits-eligible retirees to contributing workers — has declined, due to improved longevity and a falling birth rate. Though the total of benefits to be paid is not rising rapidly, relative to GDP, the tax base is not growing fast enough to fund the existing system.