1. Rethinking Social Security from a Global Perspective: What Congress Can Learn from the Experiences of Canada, Germany, New Zealand, and Sweden
- Author:
- Romina Boccia and Ivane Nachkebia
- Publication Date:
- 06-2025
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Social Security is projected to reach technical insolvency by 2033, threatening retirees with automatic 23 percent benefit cuts as the program will be unable to pay full benefits on time. The program’s looming trust-fund insolvency creates a legislative forcing mechanism and thus presents an opportunity to reimagine how Social Security could work. Policymakers should consider fundamentally rethinking the program’s structure and transform it into a system that ensures seniors are protected from poverty when they can no longer work, while also freeing up resources for younger workers to save more on their own. With Social Security running large and rising cash-flow deficits since 2010, and given a political desire to protect most current retirees from being affected by benefit reductions, Congress should act now to stabilize the system—not procrastinate any longer, which only ensures that inevitable changes will be more drastic and economically harmful. The longer Congress waits, the more people will be locked into the current unsustainable system, and the higher the burden will be on younger generations to finance it.
- Topic:
- Poverty, Reform, Fiscal Policy, Social Security, and Sustainability
- Political Geography:
- Canada, Germany, Sweden, and New Zealand