[Federalist] Social Security has a huge free-rider problem. To illustrate, imagine two couples, the Nukes (as in a nuclear family) and the Dinks (as in "double income, no kids"). The Nukes always dreamed of having a large family. But they are hampered by the double burden of paying for the Social Security subsidies of the last generation while they pay for the upbringing of the next generation.The cost of daycare is roughly equivalent to the later cost of college. The Nukes end up spending $233,610 per child to raise them on top of the $600,000 they pay in Social Security taxes. Those taxes pay for current retirees and are not saved for either the Nukes or the Dinks. On top of that, Mrs. Nuke lost $230,000 in lifetime earnings because of her decision to bear children.
The Dinks, in contrast, avoided all of those child-raising and college expenses. Mrs. Dink stayed in the workforce her entire career, yielding a much higher salary. The Dinks might pay exactly as much in Social Security taxes as the Nukes did. But when the Dinks and the Nukes retire, both the Nukes and the Dinks will rely on the taxes collected from the Nuke children in order to fund their retirement. The Dinks might retire in relative luxury with all the money saved from skipping children; the Nukes might barely scrape by.