2).

             David C. John describes the current system as paying an inflation‑indexed monthly retirement and survivors' benefit that is based on a worker's highest 35 years of earnings: .

             Past earnings are indexed for average wage growth in the economy before calculating the benefit. The benefit formula is progressive, meaning that lower‑income workers receive a benefit equal to a higher proportion of their average income than upper‑income workers receive. The program is expected to continue to collect more in payroll taxes than it pays out in benefits until about 2018 (John para. 14).

             The federal government borrows payroll taxes that are unused and replaces them with special‑issue Treasury bonds. If the system begins to pay out more than it receives, the federal government covers the resulting cash flow deficits by repaying the special‑issue Treasury bonds out of general revenues: .

             When the bonds run out in about 2042, Social Security benefits will automatically be reduced to a level equal to incoming revenue. This is projected to require a 27 percent reduction in 2042, with greater reductions after that (John para. 15).

             Some analysts see a potential for the system to bankrupt itself, while others project solvency into the foreseeable future. There is obviously some uncertainty about the future of the system and also about efforts to alter the system into something else. Currently, a number of alternative systems for retirement are offered and promoted as helping alleviate the strain on Social Security and so as protecting the system from bankruptcy.

             The nature of the battle over such so-called entitlements is made clear by Steve Forbes when he notes that what usually happens is that the Republicans recommend "reforming" Social Security by allowing workers to put aside a small amount of money in a personal savings account while the Democrats will see this as destroying the program and will advocate solving the problem by taxing the rich at a higher rate.