Our ability to manage Social Security as a "pay-as-you-go" program (in which taxes collected from those currently working are used to make benefits payments to those currently retired) is impaired when the "dependency ratio" (defined as the number of retirees per worker) increases. The current concern about the stability of Social Security is primarily based on projections that there will many more retirees per worker when the baby boomers begin to retire. Then, if we want to maintain a pay-as-you-go system, we can:
A) reduce benefits to compensate for the increase in the dependency ratio.
B) raise benefits to compensate for the increase in the dependency ratio.
C) maintain current benefit levels with no changes to how social security is financed.