Will the Social Security Administration continue payments it is obligated to make for Old-Age and Survivors Insurance and the Disability Insurance Trust Fund? Probably not. Payments may well be cut to 80% of currently expected levels. That leaves over 60 million Americans with less money to live on than expected.
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In the latest Social Security and Medicare Trustee Report, the trustees pointed out that income paid into the fund will no longer be sufficient to support antiquated payments. An aging population will not help. Fewer Americans will support Social Security recipients.
The only ready solution to the problem is to increase Social Security taxes. Congress is unlikely to do that. A proposal to raise taxes of any kind is rarely popular with voters.
One enemy of the length over which Social Security can be paid is inflation. The Trustees reported, “Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 8.7 percent in 2023.” The consumer price index has been high enough that another large bump may hurt the balance of the funds again in 2024.
24/7 Wall St.One core of the problem is that, if Social Security payments are decreased because the funds have started to run low, older Americans will have less money to spend, both on essential and discretionary spending. That, in turn, slows the economy. As many as 60 million Americans could feel this reduction in income
Few people think about how Social Security payments might affect gross domestic product in the next decade. It is worth some consideration, by individuals, businesses and Congress.
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