About 66 million Americans rely on Social Security. For some unknown number is their only source of income. If the debt ceiling problem is not solved, the finances of tens of millions of people will be ruined. Social Security payments will be delayed without an agreement between the president and congressional Republicans. (The national debt under each president in the past century.)
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The loss of income for many Social Security recipients represents one of the largest catastrophes for people who cannot afford shelter, food or clothing without these payments. Even if, for a short time, they are driven into poverty, it almost certainly will take several delayed payments to catch up on delinquent bills. The nation could be awash with people who do not have a cent to live on.
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The Social Security payment problem has one other terrible wrinkle: seniors who do not have money cease being consumers. Businesses that count on sales from these Americans will lose billions of dollars nationwide. The blast zone of delayed payments is, therefore, enormous. Imagine if thousands of companies lost their profits, even if only for a matter of days.
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Unfortunately, America runs on a population in which 11% of people live in poverty. What it would mean if that figure moves to 15% or greater is unimaginable. People who do not have Social Security will be the equivalent of those who are unemployed. As a side matter, the payments to some of those out of jobs could also cause a loss of government aid.
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Someone somewhere has modeled the results of the effects of a lack of payments. They may be wise to keep the results to themselves. Whatever loss happens to the economy without a debt ceiling compromise, the financial world of many (particularly those over 65) will be horror without precedent.
Social Security Could Be Wrecked by Debt Ceiling
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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