The Trump Administration realizes that the quickly growing national debt must be reduced. The current public debt exceeds $36 trillion, and the interest expense is approaching $1 trillion annually. Since entitlement programs account for about half of annual government spending, that spending must be reduced. But how?

There are no good solutions to reducing deficit spending for Social Security and Medicare.

One solution is to raise the Social Security (SS) tax. But that tax is already 12.4% of an Americans’ wages up to $176,000, (the worker pays half, and the employer pays half.) That means about 90% of workers pay the SS tax on all their wages.

Worse, each American pays 2.9% Medicare tax on all the wages with no limit. (Again, the worker directly pays half, and the employer pays half.)

That totals 15.3% of wages. Then of course, the worker pays federal income tax, state income tax in most states, a sales tax on most consumption in most states and local taxes.

Raising the tax rate on SS or Medicare is not a good solution. How about reducing those payments to retirees and the elderly?

That is not a good solution either. The elderly have paid those taxes for their entire working life, usually about 45 years. It is simply unfair to reduce the benefits to the elderly, many of whom find SS is their only means of support and Medicare is the only health insurance they have.

We are in this position because both Social Security and Medicare are pay-as-you-go programs. That means the people who are working now pay the benefits for those collecting. Then when the working people reach retirement, their benefits are paid by the next generation of workers. (Some have mentioned the name Charles Ponzi when discussing this arrangement.)

The system seemed to work well in its inception in 1935. At that time, the SS tax rate was 2%. The worker paid 1% and the employer paid the other 1%. Workers retired at 65. The average life expectancy was 67, so the average worker collected benefits for about two years.

Demographics and longer life expectancy are the problems. Baby Boomers are a sizable portion of the population. They began retiring in 2011. By 2028 all sixty million still living will have retired. And they are living longer, meaning they could collect Social Security benefits for twenty years or more. Some live a lot longer.

Making the problem worse, there is also a smaller portion of the population working due to lower birth rates in subsequent generations. In 1935 there were seven workers for each person collecting. Today there are less than three. That means something must be done or the system will be unable to meet its future obligations.

Many forecasts conclude that both SS and Medicare will be insolvent within the next eight to ten years.

Since government spending must be reduced to shrink the annual budget deficient and stop the public debt from growing and since there is no good solution to reducing the annual spending deficit for SS and Medicare, the least bad solution must be found.

Indeed, when there are no good solutions to a problem, the least bad solution makes the most sense. In this case the lease bad solution is to gradually raise the retirement age from the current 65 for Medicare and 67 for SS to at least 70 and eventually to 72

That would mean Americans, unless they plan for their retirement without depending on the government, would continuing working past 67 and to at least 70. With more Americans working and paying into the system, revenue for both the Social Security and Medicare would increase.

Also, there would be fewer Americans collecting from the system so spending on those programs would be less. With more revenue and less spending the deficit would be reduced. Eventually the retirement age would have to increase enough to eliminate any deficit spending for those programs.

While this may seem unfair to some, it is the least bad solution, especially since people are living much longer. The average American is likely to live about 20 years or more after retirement. It simply is not reasonable to expect the entitlement programs to pay for 20 years of retirement.

While this solution has been suggested in the past, it was never taken seriously. It is time to seriously examine this least bad solution.

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Michael Busler is a public policy analyst and a professor of finance at Stockton University in Galloway, New Jersey, where he teaches undergraduate and graduate courses in finance and economics. He has written op-ed columns in major newspapers for more than 35 years.