Social Security Insolvency: A Contrarian Viewpoint - RealClearMarkets.com
Social Security’s looming insolvency is drawing increasing attention in a growing number of media outlets, including those affiliated with prominent think tanks providing policy assistance to legislative bodies. Within this swell of attention, there seems to be a consistent view, at least with respect to the simple — and verifiable — fact that Social Security’s steadily increasing deficit mode presages a substantial problem about six years down the road. Various experts may quibble about the magnitude of the impact on America’s seniors (is it an 18% benefit cut, or more like a 24% cut?), but virtually all those willing to address the issue understand that insolvency will occur if Congress does not take corrective action.
So, amidst this cloak of unanimity, it comes as something of a surprise to encounter an editorial viewpoint totally out of sync with popular thinking on the Social Security insolvency issue. In a February 20 RealClearMarkets post, editor John Tamny, President of the Parkview Institute and a senior fellow at the Market Institute, offers opinions that challenge conventional thinking on the insolvency issue. For example, Tamny asserts “Social Security is not going bankrupt, and by extension benefits won’t be cut. Not now, not in four years, not in forty.” Further, he asserts that even if monthly benefits were cut, “existing and future retirees wouldn’t much care …” You can read Tamny’s full article here…
How is this so?
Tamny underscores his premise with this statement: “Of course, the fact that Congress has always spent what the Social Security Administration (SSA) didn’t pay out means that if Social Security ever goes “bankrupt,” Congress will cover any benefits payments that the SSA lacks.” Given the more than $38 trillion debt already in place, one wonders how this would play out in reality?
Also, the assumption that retirees wouldn’t be concerned about a chunk of cash being cut from their monthly benefit payment seems to differ from many research findings on how Americans view the possibility of benefit cuts. An excerpt from The Nationwide Retirement Institute®2025 Social Security Survey, for example, found that “More than half of U.S. adults receiving or expecting to receive Social Security say they could not financially survive missing even half of a monthly payment.”
Alternate Viewpoints Fuel Discussion
As the hourglass winds down and the discussion pace accelerates, there will be many competing viewpoints on how best to handle Social Security’s financial situation. Some will advocate program reform, as in the case of AMAC’s Social Security Guarantee, while others suggest simply waiting to see what happens in Congress. Viewpoints like those expressed in John Tamny’s post are an important part of the debate, fostering out-of-the-box thinking that challenges conventions.
Either way, 2032 will arrive, and Social Security’s status quo will change. Or, possibly not? Stay tuned here for continued updates as the calendar pages turn.