Final answer:
To fix the social security issue for Generation Z, options include increasing the retirement age, the social security tax rate, reducing benefits, or means-testing eligibility. The aging population implies higher spending on Social Security and Medicare, potentially leading to more taxes or federal deficits if no action is taken.
Step-by-step explanation:
A possible solution to address the social security problem that Generation Z is facing includes several options. One is to increase the retirement age, which has been done in the past when the age was raised from sixty-two to sixty-seven to help alleviate financial pressures on the system. However, this is just one potential solution and other options include increasing the social security tax rate, reducing benefits, or implementing means-testing for eligibility.
The long-term budget outlook for Social Security and Medicare indicates that without changes, spending will rise significantly as a proportion of GDP, which could lead to increased taxes, reduced government spending in other areas, increased federal deficits, or a combination of these adjustments. Given the aging population, especially with a projection that by 2030 one in five Americans will be over age 65, the fiscal challenges to these programs are substantial.