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Worst case for social security is that no funding changes are made and payouts stabilize to around 70% of what was promised. Very bad for a lot of people but fa

• village-idiot 8y ago
  The problem is that a large number of unfunded obligations will probably come due at roughly the same time. We all know that our infrastructure is starting to crumble, but the problem is that every single bridge that needs to be rebuilt either represents a future debt to fund the construction, or a willingness to abandon the economic activity that the infrastructure (hopefully) enables. The worst case scenarios is that Social Security, Medicare, some state pensions, and our infrastructure will all hit the breaking point at once. At that point we will need to make some deeply unpopular changes, and it's unclear if our political system has the will or the coherence to pull it off. If we're lucky, these systems will begin failing sequentially within the next few years, rather than all failing together.
  • toomuchtodo 8y ago
    If we're lucky, failures will compel voters and politicians to raise taxes to pay up and stop kicking the can.
    • village-idiot 8y ago
      I think we’re past that point. We can and should raise taxes, but reductions in expenditures is going to have to be on the table too. Our expensive wars come to mind.
      • toomuchtodo 8y ago
        Agree, it's going to require regime change.
        • village-idiot 8y ago
          I genuinely doubt we have the political will to do it. There are a large cohort of people who know they’ll be dead before these issues come to a head, and they have reverted to a “protect what’s mine” mode.
    • swarnie_ 8y ago
      > raise taxes to pay up and stop kicking the can Does the US have the same old vs. young divide in politics as seen in Western Europe? A policy change asking the young to pay even more for the older generations who arguable had it better/easier would not be an easy thing to pass in France, Germany or the UK.
      • toomuchtodo 8y ago
        We do.
• NTDF9 8y ago
  I might be naive here but I suspect the Fed will just print money and hand it to the govt which will keep the can rolling ahead. Devaluation seems the only right answer to me
  • AnimalMuppet 8y ago
    That's not the right answer at all. It has been tried several times, and it usually (always?) ends in disaster. The problem is that printing money and handing it to the government causes inflation. This is essentially the same as devaluation, as you said, except for one difference: devaluation is a one-time event, whereas inflation tends to not be. In particular, next year the government is also going to need money to keep Social Security running. But it's going to need more, because of this year's inflation. And there's going to be all the people further in poverty because of this year's inflation, so other government expenses go up. So the Fed has to print more money next year. So next year's inflation is worse than this year's. So the year after that, the Fed has to print even more money...
• dragonwriter 8y ago
  > Worst case for social security is that no funding changes are made and payouts stabilize to around 70% of what was promised. No, worst case is that dishonest political propaganda convinces people that the no action scenario has worse results than this, leading to action being taken which itself has worse results, such as dismantling social security in favor of mandatory investment in private defined-contribution retirement products.