Is the trajectory of the Social Security Trust Funds running out of money a concern? When looking through the prism of federal budget pressures, including the steady rise in interest rates (eleven rate hikes) since March of 2022, this may be a good time to devise real solutions to the problem.
Consider this, the specter of rising rates, coupled with a national debt of $32 TRILLION, has caused expected interest payments on the national debt to approach $1 TRILLION a year, according to the Federal Reserve Bank of St. Louis. And folks, that would be a trillion dollars of interest expense from a total federal budget of about $6 trillion– that’s a big chunk going towards interest payments! Any budget expenditure used to make interest payments leaves that much less available to address an expected Social Security shortfall or any other issue that needs fixing.
So, what can be done? While there is no easy answer, looking back to a more practical and bipartisan era of government provides hope (and a reminder) that government can work. The many compromises hammered out by resolute conservative President Ronald Reagan and liberal stalwart House Speaker Tip O’Neill could only be accomplished by working together while in office.
In the excellent write-up I’ve included below from the Chicago Booth Review, you’ll see that by law, when the trust funds go to zero, Social Security payments must be automatically cut to match Social Security revenue. Estimates show that the projected cuts to benefits may be about 23% beginning in 2033. Nothing is set in stone yet, but time is ticking for a viable solution.
This country needs leaders willing to make deals like Tip and the Gipper to make Social Security sustainable for future generations!
What do you think about the future of Social Security- reach out to let me know by clicking here.
~ Brian Kasal- The Leadership Matrix
P.S.- Did you see my last Leadership Matrix post? Signed! NASA Deal to Build Cutting Edge Rocket System
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