Final answer:
Economists have proposed solutions like removing the cap on payroll tax income and creating individual savings accounts for Medicare and Social Security to address program shortfalls.
Step-by-step explanation:
Proposed Solutions to Social Security Shortfalls
Economists have proposed several solutions to reduce the cost of Social Security in response to anticipated shortfalls. One notable suggestion involves removing the cap on wages subject to the payroll tax, which would require those with very high incomes to contribute more by paying the tax on all their earnings. Currently, there is a limit on the amount of income that is subject to this tax, but removing the cap would increase the funds available for Social Security.
Another distinct proposal looks to transform the structure of Medicare and Social Security. The idea is to shift these programs from the current model, where workers pay for retirees, to one that emphasizes savings accounts. Under this new approach, individuals would save money over the course of their working lives and then draw upon these funds after retirement to pay for healthcare. This concept would likely involve significant changes to existing tax and benefit structures to establish these personalized accounts, which would be intended to fund the individual's own retirement needs.
It is important to note that these ideas are proposals and have faced challenges in gaining widespread support due to various social, economic, and political factors. Changes to Social Security and Medicare involve complex considerations and are subject to extensive debate among policymakers, economists, and the public at large.