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In their 2024 report to Congress, the trustees of the US Social Security system projected that the Old-Age & Survivors Insurance Trust Fund used to pay benefits to retirement-age workers will be exhausted by 2033. If OASI goes bust, benefits will need to be cut to match the income the trust fund receives from payroll taxes—which, the trustees estimate, will only be enough to pay 79 percent of what recipients would otherwise receive.
How is the federal government likely to address the issue, and what should it do? To find out, Chicago Booth’s Kent A. Clark Center for Global Markets polled its US panel of economic experts.
Daron Acemoglu, MIT
“Currently, yes, borrowing looks more likely. But political economy can change a lot within the next 10 years.”
Response: Uncertain
Steve Kaplan, Chicago Booth
“Tough problem. At some point, the US will need to rationalize benefits. The changes it makes should reflect the fact that the world is different than it was 90 years ago when Social Security started. They should reflect increased life expectancy and should reflect inflation (which the system did initially) rather than wage growth.”
Response: Uncertain
Larry Samuelson, Yale
“It has become extremely difficult politically to either raise taxes or to cut benefits.”
Response: Agree
Hilary Hoynes, University of California at Berkeley
“Taxes, yes. Not best to reduce benefits across the board. I would preserve benefits for low-wage workers and those unable to work to advanced ages.”
Response: Uncertain
Anil K Kashyap, Chicago Booth
“Especially if the benefit cuts were graduated and tilted toward high earners. This would have been much better to address 20 years ago when the baby boomers had time to adjust to planned reductions. Probably too late to do anything now for that cohort.”
Response: Agree
James Stock, Harvard
“Increasing the normal retirement age should also be on the table.”
Response: Disagree
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