Safety nets are for the inevitability that a number of persons will not be able to maintain a minimally reasonable lifestyle in their elder years. Looking at the numbers of current elderly persons who rely heavily on Social Security, that number can be fairly high.
The real issues are (1) how should a safety net be funded, and (2) how high should the safety net be set.
The safety net should be established by requiring each worker, with his or her own payroll taxes, to invest in a mandatory personal retirement account. Any worker who invests roughly 10% (perhaps even less) of his or her lifetime payroll in a personal retirement account should in their elder years have a sufficient amount to continue a similar lifestyle in retirement.
Because our country is based on freedom, I am not sure that the government should be involved in decisions to require people to save enough to assure more than that they be kept out of poverty in their old age.
Even in a system of mandatory personal retirement accounts, some people may not have a sufficient accumulation to keep them out of poverty. To protect against such (probably infrequent) occurrences, a supplemental benefit should be paid to those whose personal retirement accounts and other assets fail to provide a sufficient amount. However, since this would be a welfare benefit, it should be funded by progressive general taxes, not by regressive payroll taxes.
The principal problem with the current Social Security safety net is the means by which it is funded.
(1) Because Social Security is a wealth transfer instead of a wealth creation system Social Security uses workers' current income for current excess (above poverty) consumption of the elderly instead of for investment purposes. This has led to the deterioration and decline of our economy from 1973 to the present, as seen by declines in real median incomes for younger households. See http://www.census.gov/hhes/income/histinc/h10.html
(2) Because Social Security's safety net is funded entirely by regressive payroll taxes up to a certain income cap, it is a social device whereby the existing class structure is set in stone. Instead, it is the middle class that pays for the cost of lifting the poor elderly out of poverty. Those who earn more than the income cap or who earn their income through capital gains, dividends, interest, rents or royalties pay no additional amount to achieve this general welfare goal. As the payroll tax has increased to support this general welfare goal, many within the middle class who might otherwise have achieved far more in their lives have found the seed resources necessary to make those achievements eaten away.
