The financial pressures facing Social Security have been well documented over the years. The retirement scheme is about a decade away from collapsing, and the US government has conceded that there is no plan to save the program. The New Deal is nearly a century old, but today’s generation cannot keep up with sustaining the Depression-era entitlement. Just how bad is it? The Treasury Department released a report – and let’s just say that a fiscal bomb is going to explode.
The Social Security Hindenburg
Last year, the Social Security Board of Trustees (SSBT) predicted that its trust funds would be exhausted in 2033 and only have enough to cover about 80% of the scheduled benefits. Based on the findings of a recent government study, this is only the tip of the iceberg.
According to the Treasury’s Feb. 2024 Financial Report of the United States government, federal expenditures for Social Security and Medicare Parts A, B, and D, and other social insurance programs over the next 75 years are projected to exceed social insurance revenues by more than $78 trillion. Believe it or not, this is up $2.5 trillion from 2022 forecasts.
Officials estimate that the federal government will need to generate an additional $26.6 trillion in this span to support the trust fund.
The White House admitted that it has no strategy to tackle the issue. Appearing before the Senate Finance Committee, Treasury Secretary Janet Yellen conceded that the administration “doesn’t have a plan” to save Social Security. She told Sen. Bill Cassidy (R-LA): “[The president] has principles. He wants to work with Congress to find a way to protect Social Security and extend its solvency beyond 2034.”
While the primary principle for both President Joe Biden and presumptive Republican nominee Donald Trump is not to reduce benefits, the SSBT has warned of trimming payments by 20%. The situation will deteriorate until politicians on both sides of the aisle act like adults and take the problem seriously. This is unlikely to happen, and, like the Hindenburg disaster, the public will hear, “Oh, the humanity!”
The War on Shrinkflation
This year, the incumbent president has found a new culprit to blame for inflation: shrinkflation. This is the act of companies shrinking product sizes and keeping prices the same to grapple with inflationary pressures. US administration officials contend this is one of the chief causes of today’s above-trend inflation climate. Of course, this falls short of economic logic, but it has not prevented lawmakers from taking the claims seriously.
(Photo by: Lindsey Nicholson/UCG/Universal Images Group via Getty Images)
Reps. Chris Deluzio (D-PA) and Marie Gluesenkamp Perez (D-WA) submitted the Shrinkflation Prevention Act, a bill to prohibit businesses from lowering the sizes of their goods without simultaneously decreasing prices. The legislation will order the Federal Trade Commission (FTC) to produce regulations to identify shrinkflation as deceptive and allow the federal agency and state attorneys to explore civil actions against corporations practicing shrinkflation policies.
“Shrinkflation is a ripoff – yet another way that big corporations are sticking it to folks,” said Rep. Deluzio in a statement. “People in Western Pennsylvania are feeling the pinch from corporations charging more for less to pad their profits at our expense. It’s time to fight back.”
Former Congressman Ron Paul says Washington should blame the Federal Reserve rather than corporations for shrinkflation. “Unless greed is the only human emotion that fluctuates with the Federal Reserve’s policies, the fact that shrinkflation only occurs when Federal Reserve policies cause major price inflation should show anyone willing to think logically about these issues that the Fed, not greedy businesses, causes shrinkflation.”
Paul added that if President Biden wished to halt inflation, he would reduce federal spending and start paying down the national debt. “These steps would allow the Federal Reserve to reduce its efforts to monetize the federal debt in order to keep borrowing costs low.”
Thumbs Down for Gen Z Workers
RedBalloon, a non-woke job board, published the results of its March Freedom Economy Index, a monthly survey of 80,000 small business owners. The RedBalloon-PublicSquare study examined employers’ thoughts on the TikTok ban, cryptocurrency, hiring trends, inflation, and recession. One facet of the report that could raise some eyebrows is firms’ thoughts on Generation Z workers.
“The 2024 labor market will be one of the most difficult in decades,” said Andrew Crapuchettes, CEO of RedBalloon.work, in a statement. “With large scale retirements by baby boomers, the market needs an influx of new talent, but Gen Z is clearly struggling to make the grade.”
What are their thoughts on the new generation of workers? Sixty-eight percent of small business owners think Gen Zers are the “least reliable” of all their employees, while less than 4% say that Gen Z is the generation that “most aligns with their workplace culture.” Nearly three-quarters (71%) report that Gen Z is the most likely group to suffer from a workplace mental health issue, 62% note that Gen Z is the most likely group to cause division and toxicity at the office, and more than half (57%) said in the study that Gen Z is the most likely group to pose a risk of a workplace lawsuit.
Is this a case of the older generation complaining about the young whippersnappers, or is it a serious issue that could prove detrimental to the workplace?
