The latest report from the Social Security trustees indicates that the combined accounts for the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund are projected to run out of money in eleven years. While there is a possibility that incoming payroll taxes could cover 83 percent of scheduled benefits, it is uncertain what the future of Social Security will look like. Fixing the program will likely require a combination of tax increases and benefit cuts, but there is resistance to both options in Washington. Many believe that upper-income Americans will need to prepare for less generous benefits in the future.
Historically, Democrats have resisted major changes to the benefit formula of Social Security, as the program is seen as a form of self-insurance rather than redistribution. However, the program has roots in racist reasoning, with concerns that Black people would not work if given government retirement benefits. If a choice between cutting benefits for upper-income Americans or raising taxes drastically arises, voters may choose the former. Countries like Australia and Canada have lower maximum benefits than Social Security, suggesting that changes may be necessary to ensure the program’s sustainability.
Social Security depends on a continuous flow of new contributors to sustain the benefits for retirees. With fewer workers per beneficiary and dwindling trust funds, the program is facing challenges that demand change. Solutions proposed by some experts include reducing or eliminating tax preferences for retirement plans in order to support Social Security. While some believe that most retirees are financially stable, others contend that many older individuals are not saving enough for retirement, especially those who earned less during their working years.
Ukraine has targeted Russian oil refineries in a series of strikes, leading to a decrease in Russia’s oil-refining capacity. While there are concerns about the impact on global energy prices, some experts believe that the attacks are actually driving prices down. With Russia forced to export more crude oil due to reduced domestic refining capacity, global oil prices may be affected. Despite the uncertainty surrounding Social Security and global energy markets, it remains clear that changes are needed to address the challenges facing these systems.
