"The latest estimates from the Congressional Budget Office show that the Social Security trust will run out of money by fiscal year 2032, which starts on October 2031. That means anyone who wins a Senate seat in this year's midterm elections will be in office when it's time to fix the entitlement program's finances. But it will be tempting for lawmakers to avoid making tough political choices like cutting payments or hiking taxes."
"In a Creators Syndicate op-ed, she warned financial markets would immediately account for the additional borrowing. "What most people are missing is that, this time, the consequences may show up quickly," de Rugy wrote. "Inflation may not wait for debt to pile up. It can arrive the moment Congress commits to that debt-ridden path.""
"For decades, surplus payroll tax revenue was socked away in the trust fund, which was designed to be tapped when revenue was no longer sufficient to cover benefits. That milestone came in 2010, and the trust fund has been rapidly shrinking since then. If Congress fails to take any action before insolvency hits, Social Security benefits would be paid only with revenue that comes in."
The Social Security trust fund is projected to be depleted by fiscal year 2032. Lawmakers face choices including payment cuts, tax increases, or financing the shortfall with more federal debt. Additional borrowing risks rapid market reactions that can drive inflation and higher interest rates sooner than expected. The trust fund grew from surplus payroll tax revenue but began being tapped in 2010 and has declined since. If insolvency arrives without legislative fixes, benefits would be payable only from incoming revenue, producing substantial benefit reductions for retirees under current projections.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]