As the 2020 presidential campaign heats up, it's disturbing that members of both parties seem unwilling to talk about Social Security. It appears that the program is on such shaky ground that even its mention is political dynamite. How bad is it? Social Security will become insolvent in just 16 years. Who says so? The people who run the Social Security Administration.
Social Security Will Be Bankrupt
Let's be crystal clear about what's happening. Politicians and bureaucrats used to use the word "insolvent" to describe Social Security's future. They've now started to use the term "reserve depletion." The rest of us should use the correct term: bankrupt. Social Security will be bankrupt in 16 years. Politicians pull a sleight of hand by saying (when they manage to say anything at all) that Social Security won't be bankrupt because it can continue to make 80 percent of promised payments into the infinite future. Everywhere outside the Washington beltway, "bankrupt" means the inability to make promised payments. Being able to make partial payments doesn't count. Those in doubt are welcome to try the argument with their credit card companies.
The bottom line is that within 16 years, either Social Security recipients will have to take a 20 percent benefits cut, or workers will have to incur a 20 percent payroll tax increase. Either way, at least someone, and likely everyone, is going to be getting a far worse deal from Social Security than Social Security has promised.