1) massively increase taxes - which is a dead letter politically. People are simply not going to be willing to pay a lot more in taxes to pay out to retirees.
2) cut social security benefits. They've been linked to wages rather than inflation for a long time (wages grow faster usually). Thus in real terms SS payouts have increased. This will encounter fierce resistance from those collecting SS and those who are near retirement age.
3) raise the retirement age. When SS was implemented the average life expectancy was.....drumroll......65. Yes that's right? You were expected to pay in and then die before collecting anything. Well now life expectancy has stretched out to 79-80. That opened up a 15 year window of payouts on average. Obviously, that's hugely expensive. Raising the retirement age is probably the least painful way to effectively reduce the payout and it gets people paying in for an additional time.
It was a ponzi scheme from day 1. People were not paid benefits based on what they had put into the system. They were paid benefits starting on day 1 of the program. That can only work so long as people crank out the kids so we have a lot more taxpayers paying into the system. Well....people did not uphold their end of the deal starting at about 1965 or so when the baby boom ended. We simply have nowhere near enough taxpayers to support the massive baby boom generation in retirement.
You can shake your fist at the heavens and get as angry as you want about it but that's not going to change anything. Either we do one of 3 options above (or a combo of all 3) OR the government is going to deliberately stoke inflation so as to pay out SS and other benefits with dollars that are worth a whole lot less - ie a "constructive default". This is what governments have done throughout history. They have debased the currency when they could no longer pay their debts.
Good post.
“OR the government is going to deliberately stoke inflation so as to pay out SS and other benefits with dollars that are worth a whole lot less - ie a “constructive default”. This is what governments have done throughout history. They have debased the currency when they could no longer pay their debts.”
That is what is going to happen.
Tinkering with the system at this point is just a political death march.
The reason is because the rest of the budget is also a dumpster fire—and unless you assume all of it is massively cut together nothing has been solved.
It won’t crash and burn as long as they can create fiat money. Defaulting on SS is a hoax.