Is Social Security Really Insolvent? What Is The Source Of Your Projections?

Jul 4 2016 - 9:30am

Hi Larry,
I am familiar with your work on unfunded entitlements in general but not in detail. I have heard it said that those predicting the worse case for SS pension system itself, as opposed to Medicare, are proponents of privatization so they deliberately apply worst case economic growth projections for decades into the future - hence the need to privatize and get better returns in the markets. All this ignores, of course, that the stock market is not likely to perform well either if the economy grows 1% per year for 30 years.
So, my questions for you is, what are the growth assumptions behind your projections of massive unfunded liabilities for the pension system itself? Are you generally using worse case numbers in your calculations of income and outgo for the pension system? I am a policy wonk layman myself so could go on at length but will leave it at that. Thanks, Charles

Dear Charles,

I discuss Social Security's and the entire country's fiscal insolvency in my free campaign platform book posted at But the quick answer is I always use the government's own middle-case projections. In the case of Social Security, please look at table VI F1 in the 2015 Trustees Report. It shows the system's long-term fiscal gap is $26 trillion. And this is based on "intermediate assumptions." The worst case projections are far worse.

best, Larry