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A Contrasting View on Insolvency…Perhaps It’s Not as Dire as Many Believe?
Since the release of the 2025 Social Security Trustees Report last week, media accounts of the 2033 depletion of the program’s Old Age and Survivors Insurance (OASI) cash reserves have focused on the consequences: the 23% across-the-board benefit reduction that beneficiaries would face. That’s generally accepted as the immediate problem, with only eight years available to determine what reform measures are needed to ensure the program’s sustainability beyond 2033. Nothing really new here…the alarm bells have been ringing for longer than the past three decades, with the sound volume growing louder with each issue of the Trustees Report.
But wait…is insolvency as big a deal as many think it is? Center for Economic and Policy Research senior economist Dean Baker suggests that the hysteria might be overblown, challenging the prevailing concerns about generational inequality, the conventional thinking on ways to close the income and revenue imbalance in the system, and the aversion to tax rate hikes as a means of correction. As the name of the website carrying the Baker post–CounterPunch.org–suggests, the points raised here are at odds with much of the current thinking on the subject. It’s an interesting read, and it brings into the equation several points that should be considered in the overall picture. Check it out here…