When the Trustees of Medicare and Social Security recently reported that their trust funds would go bust by 2026 and 2034, respectively, the public yawned.
Even a wealth management column published last week in the fiscally vigilant Wall Street Journal soothingly advised adults approaching retirement, “Yes,” Social Security “is facing a financial shortfall, but it will never go broke.” As the Beatles song goes, “Ob-la-di, ob-la-da, life goes on.”
Except these current spending and taxing policies cannot go on. As then-Federal Reserve Board Chair Ben Bernanke told Congress in 2011, “The unsustainable trajectories of deficits and debt [under current policies] cannot actually happen, because creditors would never be willing to lend to a government whose debt, relative to national income, is rising without limit.” His successor, Janet Yellen, testified similarly in 2014.
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