The Uneasy Combination Of Grade Inflation, Lax Graduation Requirements, & AI

  "AI & robots will replace all jobs" - Elon Musk speaking in May, 2024 via remote webcam during the VivaTech 2024 conference in Paris.  In October, 2025 Musk reiterated these remarks on X.   While discussing the future of automation, Musk said, "Probably none of us will have a job," adding that AI & robots will provide any goods & services anyone wants.

  "Not for most things" was Bill Gates' response in 2025 to Jimmy Fallon's question on the Tonight Show regarding whether or not human beings would be needed.  Gates' time frame was the next ten years.

Elon's & Bill's remarks above highlight one of two fundamental questions pertaining to the artificial intelligence (AI) mania that has propelled the stock market to record heights: 1) will AI wipe out all jobs?  The second fundamental question: 2) will AI transform jobs like the automobile industry did when buggy whip manufacturers learned to be auto assembly line workers?

We see in the first question that there will be people - unemployed people, & in the second there will be jobs - but do we have a sufficient number of people with knowledge & skills to fill these new & different jobs, if they do appear? 

We are not @ a good starting point to consider these two possibilities.  The ratio of job openings to the number of unemployed people started falling after March, 2022 when it stood @ 2.02.  It had dropped to 1.13 when Trump took office & he has not stopped the decline.  In Trump's 14 months in office we crossed the divide as the ratio fell to 0.92 meaning that there are now more people unemployed than there are job openings (latest comparative date: 6.95 million job openings reported on March 31 for February & 7.57 million people unemployed in February).

In addition, the labor force participation rate fell to 61.9 in March.  Discounting the Covid era of April, 2020 through December, 2021 the last time the LFPR was this low was February, 1977.

Now economics is defined as the study of the use of scarce resources which have alternative uses.

If AI wipes out all human jobs in our first question above it can fairly be implied (& Elon stated) that AI will supply everything we want & there will be no scarcity meaning there is nothing to economise.  In such a utopian world there will be no need for jobs because AI provides an effective unlimited supply of goods & services to meet our demand in which case Professor Donald Boudreaux of George Mason University points out "the prices of all goods & services would be driven to zero" & "no one would need to earn an income.  Employment as we know it would be unnecessary, as AI will have rescued humanity from scarcity."  In short, who needs a job if our demand drowns in a sea of unlimited supply provided by AI that results in no costs?

Meta Platforms' CEO Mark Zuckerberg has announced he is building a "CEO agent" to help him do his job by getting him information faster.  Zuckerberg's goal is for everyone, both inside & outside Meta, to have their own AI agent.  In Zuckerbeerg's world it is easy to conjure up an army of robot agents who will eventually do the work of their masters on the road to wiping out all human jobs. 

But this utopian world will not happen overnight so we @ least have to address question 2 above in the short term.  After all, Keynes' prediction in 1930 of 15 hour work-weeks by 2030 doesn't look like it will happen & retiring @ 40 by the 1990s has already passed us by.

But sadly, every indication points to us not having a sufficient number of people with knowledge & skills to fill these new & different jobs until AI meets & then surpasses our demand.  In fact it is because we have this shortage of qualified people that businesses have been making investments in AI in the first place.  The stock market is cheering not because it sees a large rise in employment but because it sees a business world that uses metal robots as opposed to the purported human beings who have a hard time even showing up for an interview let alone doing a responsible job.

Other than the Covid era referenced above, there have been more job openings than unemployed people from January, 2018 until July, 2025.  During these seven years I have documented several times the difficulty businesses have had finding people who could do the work.  As AI started to replace people the past three years the number of job openings fell & the ratio dropped below 1.0 as mentioned above.

These are hard times for many workers & people seeking work.  Not only did the ratio of job openings to unemployed workers start to fall after March, 2022 but wage growth has been slowing since the second half of 2022.  ZipRecruiter reports that more than a quarter of people who recently changed jobs took pay cuts & 16.3% made lateral moves.  That's over 40% of job changers either treading water or losing ground.

Poor education & lack of training are @ the root of our problems as evidenced by Allysia Finley recently reporting that UC, San Diego offers a no credit freshman remedial math course targeting middle & elementary school levels - e.g., adding fractions & rounding numbers. The kicker is that 94% of the freshmen placed in that remedial math course had passed a high school advanced math class being awarded on average an "A-" grade.  Talk about grade inflation.  Wow.

Wirepoints reports on its website that in 2024 not a single student tested proficient in math in 80 Illinois schools & not one tested proficient in reading in 24 Illinois schools & yet these schools graduated nearly 70% of their students - all of them illiterate &/or innumerate.  More than 18,000 students attend zero reading & math proficiency schools in Illinois.  What's worse is that these numbers have increased since 2019 when there were 37 Illinois schools with not a single student proficient in math & 21 Illinois schools with not one who could read @ the proficient level.  The Wirepoints' website identifies all of these atrocious schools including those that fail to teach both reading & math, the enrollments, graduation rates, & operational spending per student.  And every parent of these 18,000 students let this happen to their children.  Who could blame employers for turning to AI?

None of these Illinois students could read & none of them went to college.  At the same time college graduates who can read but not necessarily do math (just look @ the results of the quizzes that I present from time to time) have their own problems - e.g., finding a job & paying down their  student debt.  Most of these problems stem from grade inflation & lax graduation requirements.  

For instance  in October, 2025 Amanda Clayburgh, Harvard Dean of Undergraduate Education, issued an internal report arguing that current grading practices @ Harvard are failing to properly evaluate students.

Dean Clayburgh's report predominantly refers to Harvard's practice of grade inflation - the distortion of grades that artificially & misleadingly raises an average student's true understanding of the course subject matter.  It results in a rise of average GPA without a corresponding increase in actual learning or mastery.  It cheats high performers by making it difficult to distinguish top performers based on grades thereby negating grades serving their intended purpose.

Key findings of the Clayburgh report: 1) More than 60% of grades given to undergraduates @ Harvard are "A"s, compared to 40% a decade ago, & 2) The median GPA @ graduation has risen to 3.83, up from 3.29 in 1985, with the median grade being an "A" @ Harvard since 2016 (meaning half the class receives an "A" or better).  The report goes over the school's grading criteria - namely what does a "C" a "B" or an "A" mean.  I saw only one reference to "D" in the entire report & none for "F".  People do fail @ things they try like going to college. 

The following grading criteria taken directly from the Clayburgh report is currently under review by Harvard STEM departments.

"C" range work is described as adequate & satisfactory comprehension of the course material & the skills needed to work with the course material but a "C" student may make some mistakes in applying concepts to familiar contexts & could struggle with applications beyond familiar ones.  When analyzing problems or data a "C" student can identify basic patterns but lacks depth & can make errors.  He can propose basic experiments or research projects that aren’t feasible & don’t include a solid understanding of key concepts.  On papers/oral presentations a "C" student can adequately explain some key ideas but fundamental aspects of work are unclear or incorrect & he often is unable to extrapolate how a concept or protocol could be applied to a new problem   

"B" range work is described as good comprehension of the course material with a good command of the skills needed to work with the course material.  A "B" student can apply concepts to familiar contexts with competence & effectively analyze complex problems or data, identifying important patterns & reaching logical conclusions.  He can miss some nuance & may make some claims that aren’t well supported.  He can propose experiments or research projects that are feasible & indicate a solid understanding of key concepts.  A "B" student can create written work/oral presentations that explain main ideas, while demonstrating solid understanding that sometimes contain inconsistencies, are overly simplistic, fail to make a compelling argument, &/or stop short of identifying new applications of concepts.

An "A-" student shows full mastery of the subject & consistently applies concepts to both familiar and new contexts.  He can thoroughly analyze complex problems or data, identifying key trends & make well-supported conclusions.  He can propose well-designed experiments or research projects that demonstrate a deep understanding of the subject.  An "A-" student can create written work or oral presentations that show good understanding of material, good communication skills, & an ability to transfer learning to new situations/domains.

An "A" student is an“extraordinary distinction.”  He can apply concepts to new contexts & develop innovative solutions while excelling in analyzing complex problems or data, uncovering subtle patterns & drawing insightful conclusions.  He can propose original experiments or research projects that show exceptional creativity or insight.  An "A" student can create written work or oral presentations with clear, insightful explanations, an awareness of the audience, & that illuminates the topic in a new way. 

The current grading system @ Harvard that awards a preponderance of "A"s ignores the above grading criteria that is under review.  It does not honor the superiority of the real "A" students.  It harms the real "A" students because it does not distinguish them from the other students.  This is a subtle way the colleges are weakening  America - by not acknowledging real excellence & making us all the same.    

Needless to say this problem does not only belong to Harvard - there is a prevalence @ colleges all across America.  Grade inflation & lax graduation requirements put college graduates @ a disadvantage just like the 18,000 Illinois students who can't read have been put @ a horrible disadvantage if they don't do something about it, like take remedial reading courses or be tutored.  Of course college graduates also have student loan debt that totals in five or six figures - & now, unable to find a job, have no way to pay that debt down.

Although grade inflation, lax graduation requirements, & AI make for an uneasy combination for most people, I know of two bright spots.  

The first bright spot is the 2026 biennial survey of the Council For Economic Education (CEE) that reports 39 states now require a personal finance course for high school graduation, with 22 of those states also mandating economics.  These mandates ensure over 13 million students will have access to a dedicated financial education course, marking a dramatic increase from just 6 states in 2019 that required a standalone, semester-long financial literacy course as a graduation requirement - Utah, Missouri, Alabama, Iowa, Mississippi, & Tennessee.  CEE found that students who received mandatory financial education made better financial decisions as adults, such as managing credit card debt more effectively - A 2024 study in Delaware projected an estimated $116K lifetime benefit for each participating Delaware student.  CEE also found that Texas, California, & Indiana replaced the economics requirement with the personal finance requirement which they count as a negative - they prefer both courses be required for graduation & so do I.

The second bright spot pertains to the annual survey entitled What Will They Learn? that shows the grades of over 1,100 colleges & universities evaluated & given by the American Council Of Trustees & Alumni (ACTA) .  Three years ago New College of Florida (NCF) had a failing grade from ACTA - it did not require students to take any foundational courses of value to graduate.  Today NCF has improved to a B+ grade placing it in the top 8% of institutions in the country & making it the highest-rated public college or university in Florida.  In-state tuition is less than $7,000 a year.

The national tabulation of ACTA's grades for all of the schools is as follows:

Click on image to enlarge

I present this information for the benefit of people who are in the process of selecting a college.  The above ACTA website is a common sense place to start since ACTA has done a lot of the screening work for you already.  There are many hidden gems & plenty of surprises regarding how little it takes to graduate from some schools that are living off their reputations.  Employers know these schools. 

In 2020 - 2021 the University of Georgia had a similar experience as NCF did this year in that it went from grade "F" to grade "A".  I know of one NJ student currently attending UGA & one who graduated after it became grade "A".  The latter student had no trouble finding employment in her finance field starting work @ 22 years old with a six figure salary after graduating from UGA.  Employers know these schools also.

Medicare - It's Sooner, Not Later

"I think we are derelict in our responsibilities to ignore the realities of entitlements. It is impossible to say we are defenders of Medicare & ignore the looming deadline of 11 or 12 years when it is going to be insolvent. We're not defenders. We're basically standing by & watching its demise."  - Illinois Senator Dick Durbin - February, 2013

Senator Durbin has been the Democrat Party's Senate Whip (second-highest ranking senator in the party leadership) since 2005 making him  the longest-serving Senate party whip in U.S. history.  As such he is well aware of the Medicare cash-flow insolvency that is the topic of this post.  Proof of his awareness - On April 23, 2025, twelve years after his above statement warning about Medicare's insolvency in twelve years, Durbin announced he will not seek reelection in 2026, ending his tenure in the Senate. 

Social Security, Medicare, & Medicaid form the cornerstone of the American welfare state.  All three programs are largely transfer programs where current workers' taxes fund current benefits.  Medicare Part B (doctors) was designed by Congress in 1965 to be funded by monthly premiums, adjusted each year, paid by the beneficiary that equaled 50% of the total cost with the other 50% coming from the general treasury.  This 50-50 split held only until 1972 when legislation limited premium increases thereby dropping the beneficiaries share significantly.  Starting in the early 1980s the 25 - 75 split took hold but was not formally & permanently established until the Balanced Budget Act of 1997 set premiums paid by the beneficiaries @ 25% of total Part B costs which is where it has remained ever since.

The last post reported that the Social Security trustees have determined that under current law retirement benefits will be reduced 23% starting in 2033.  The Medicare Trustees' Report for 2025 indicated that the Medicare Hospital Insurance (HI) Trust Fund would also be depleted by 2033 @ which time Hospital Insurance revenues are projected to cover 89% of incurred program costs.  Dick Durbin anticipated these projections figuring they were too close for comfort so he is getting out of Washington while the getting is good.

The graphic below shows by interpolation that most retirees received lifetime Medicare benefits as of 2025 that exceed the combination of their payroll taxes, employer's matching contribution, & premiums by over $200,000.  An individual would have to earn over $220,000 per year over their entire working career to pay as much into the system as they receive in benefits.  A two-earner household with average earnings retiring in 2020 was estimated to receive $353,000 more in lifetime benefits than they paid in taxes & premiums; this gap is projected to increase to $498,000 for those turning 65 in 2030.

Click on graphic to enlarge

So what's not to like, except it's unsustainable because the projected growth of Medicare, Social Security, Medicaid, & interest on the national debt will shortly exceed expected revenue thereby crowding out all other government programs such as education, infrastructure, & environmental protection - all Democrat party favorites.  Already, in fiscal year 2024 interest paid on the national debt surpassed total U.S. defense spending.  

The graphic below shows the cost distributions & their growth as a percentage of GDP.  Payroll taxes & (income) tax on OASDI (Social Security) benefits fund Medicare Part A Hospital Insurance Trust Fund.  Premiums, state payments & drug fees, & general fund transfers fund Medicare Part B, formal name Supplementary Medical Insurance (SMI).  Medicare Part D drugs also are 25% - 75% funded by premiums & general fund transfers respectively.  

Click on graphic to enlarge

Note - The Medicare Part A Hospital Insurance Trust Fund is partially funded by income tax payments on Social Security benefits (OASDI on the above graphic).  The provision of Trump's OBBBA known as "no Tax on Seniors' Social Security Benefits" accelerates the cash flow insolvency of the  trust fund from 2033 to late 2032.  The OBBBA was enacted after the trustee's report was issued so the report does not include this information which is a classic "pay now or pay later (when I'm out of office)" charade that shows that not only is Trump not working on solving Medicare's solvency problem, his policies are hastening the Trust Fund's demise.

The following excerpts are taken from the Trustees' report:

In 2024, Medicare covered 67.6 million people: 60.3 million aged 65 and older, and 7.3 million disabled. About 50 percent of these beneficiaries have chosen to enroll in Part C private health plans that contract with Medicare to provide Part A and Part B health services. 

The estimated depletion date for the HI trust fund is 2033, 3 years earlier than projected last year primarily due to the change in projected expenditures. 

In 2024, HI income exceeded expenditures by $28.7 billion. The Trustees project that surpluses will continue through 2027, followed by deficits until the trust fund becomes depleted in 2033.  

For HI, the primary financing source is the payroll tax on covered earnings. Employers and employees each pay 1.45 percent of a worker’s wages, while self-employed workers pay 2.9 percent of their net earnings. High-income workers pay an additional 0.9-percent tax on their earnings above an unindexed threshold ($200,000 for single taxpayers and $250,000 for married couples). 

Other HI revenue sources include a portion of the Federal income taxes that Social Security recipients with incomes above certain unindexed thresholds pay on their benefits, as well as interest earned on the securities held in the HI trust fund. For SMI, transfers from the general fund of the Treasury represent the largest source of income. The transfers covered about 71 percent of program costs in 2024. Also, beneficiaries pay monthly premiums for Parts B and D. Those premiums financed roughly 23 percent of the total cost in 2024. As with HI, the securities held in the SMI trust fund earn interest. 

Despite the significant differences in benefit provisions and financing, the two components of Medicare are closely related. HI and SMI operate in an interdependent health care system. Most Medicare beneficiaries are enrolled in HI and SMI Parts B and D, and many receive services from all three. 

Figure II.D1 shows projected costs as a percentage of GDP. Medicare expenditures represented 3.8 percent of GDP in 2024 and will increase to 6.2 percent of GDP by 2049.

Click on graphic to enlarge

Over the past 20 years, the HI trust fund experienced various periods of surpluses and deficits. Expenditures exceeded income each year from 2008 through 2015. However, in 2016 and 2017, there were fund surpluses amounting to $5.4 billion and $2.8 billion, respectively. In 2018, 2019, and 2020, expenditures again exceeded income, with trust fund deficits of $1.6 billion, $5.8 billion, and $60.4 billion, respectively. The large deficit in 2020 was mostly due to accelerated and advance payments to providers from the trust fund. In 2021, there was a small surplus of $8.5 billion as these payments began to be repaid to the trust fund, and this continued repayment resulted in a larger surplus in 2022 of $53.9 billion. In 2023 and 2024 there were surpluses of $12.2 billion and $28.7 billion, respectively. 

Fund surpluses will continue through 2027. Deficits are projected to return in 2028 and persist for the remainder of the projection period, requiring redemption of trust fund assets until the trust fund’s depletion in 2033. 

 Under the intermediate assumptions, after 2025 the assets of the HI trust fund would steadily decrease as a percentage of annual expenditures throughout the remainder of the short-range projection period, as illustrated in figure II.E1. The ratio declines until the fund is depleted in 2033, 3 years earlier than projected last year.

Click on graphic to enlarge

There is substantial uncertainty in the economic, demographic, and health care projection factors for HI trust fund expenditures and revenues. Accordingly, the date of HI trust fund depletion could differ substantially in either direction from the 2033 intermediate estimate. As shown in greater detail in section III.B, trust fund assets would increase throughout the entire projection period under the low-cost assumptions. However, under the high-cost assumptions, asset depletion would occur in 2029.

***

This post regarding Medicare & the last post regarding Social Security portrayed the fragility of both programs' financial conditions & in particular their impending cash flow insolvencies that should project the matter into the 2028 presidential race.  Imagine being responsible for 11% of a six figure hospital bill (or bills), or people, whose only income is Social Security monthly payments,​ trying to exist after double digit benefit cuts.  These conditions, for both programs, have been known by our temporary politicians for this entire century as Senator Durbin acknowledges above.

How unkind is it for our elected reps to continue​ building this house of cards until ​it is too late to not hurt anybody?  It is the elderly & people over 55 who are dependent on these programs who will be hurt the most when the programs ​give way.  Just what will these people do then?

But both many well-meaning people & duplicitous elected representatives say, without evidence, that the American people deserve better.

​Reference Post:  Premium Support Phase-In Leads To The Solution To America's Healthcare Cost Problems

Social Security - It's Sooner, Not Later

Long time readers of RTE will remember the graphic below that I have posted several times over the years.  Its far-seeing accuracy has been a guide to the few who recognized the danger & took appropriate steps in their own personal finances because sometime in the 2030s mandatory spending will exceed government revenues.

click on graphic to enlarge

Long term readers will also remember the graphic below that is updated every year in the Social Security Trustees Report with the latest being for 2025.  The Trustee's report presents the current & projected financial status of the Social Security retirement & survivors trust fund: "The OASI Trust Fund (i.e., - old-age & survivors insurance) reserves are projected to become depleted in 2033, at which time OASI income would be sufficient to pay 77 percent of OASI scheduled benefits."   DI stands for disability insurance on the graphic - a separate account from retirement & survivors benefits.  OASDI stands for the formal name of the U.S. Social Security program: Old-Age, Survivors, and Disability Insurance.

click on graphic to enlarge 

This type of warning has been made available to eligible beneficiaries for decades either online with a reminder to review your "Social Security Statement" online three months before your birthday or mailed to people over 60 who do not have an online account.  Yet I have never met a TV or radio host on any program I have been on or any attendee @ one of my FairTax seminars who was aware of this. 

The nearness of the shortfall should project the matter into the 2028 presidential race.  But Trump, Congress, & Biden continued to not only not address the problem but in 2025 made it worse.

First, Congress passed & Biden signed the Social Security & Fairness Act of 2023 on January 5, 2025.  This law repeals the Windfall Elimination Provision and Government Pension Offset, which reduced or eliminated the Social Security benefits of individuals receiving a pension based on work that was not covered by Social Security.  Therefore, implementation of this law increases Social Security benefits for people who worked in jobs that were not covered by Social Security thereby contributing to the acceleration of the depletion of the OASI Trust Fund.  

Second & more recently Trump promoted & signed into law the OBBBA that included a new senior deduction meant to represent no tax on Social Security benefits for tax years 2025 through 2028 (Trump's current term).  Total revenue generated from income taxes on Social Security benefits totaled $54.4 billion in 2024.  Trump's no tax on Social Security pledge will take money away from this total thereby exacerbating the poor condition of Social Security's finances.   It was estimated by the Chief Actuary of the Social Security Administration's Office after the Trustee's report was issued & the OBBBA was signed into law that the "No Tax on Seniors' Social Security Benefits" provision of the OBBBA accelerates the cash flow insolvency of the Social Security Trust Fund from 2033 to late 2032.   This is a classic "pay now or pay later (when I'm out of office)" charade that shows that not only is Trump not working on solving Social Security's solvency problem, his policies are hastening the Trust Fund's demise.

Since Trump has made it clear that he will not touch Social Security (other than no tax on benefits) this means that the United States will sooner, not later, need Congress & the 2029 or 2033 new president to take appropriate action.  The following graphic shows the net present value of Social Security's unfunded obligations over the long range projection of the program with the zero line crossed in 2033. 

click on graphic to enlarge

The following graphic shows the urgency of the problem even clearer in that the minimum level for the test of short-range financial adequacy is breached in 2028 - the year before the next president takes office.  Notice the graphic is for the hypothetical  "OASI & DI Combined Trust Funds."  The OASI Trust Fund, taken by itself, declines to 89% by the beginning of 2029 & remains below100% for the remainder of the short-term period, until reserves become depleted in the first quarter of 2033.  Therefore, OASI fails the test of short-range financial adequacy.

click on graphic to enlarge

The graphic below shows the financial dynamics that will be encountered when the Trust Funds are depleted if no action is taken by Congress.

click on graphic to enlarge

The above graphics tell the story that you need to know for yourself if you are near or already participating in Social Security.  But also your adult children trying to raise a family or your young children & grandchildren all of whom will be affected by the facts in the Trustee's report starting in the very near future & then staying in play for the rest of their lives too.  We are all in the same boat regardless of current age.

In addition to the above graphics, I present the following narrative directly from the Trustee's report that further explains the information shown on the graphics:

The OASDI program was providing benefit payments to about 68 million people at the end of 2024:

- 54 million retired workers & dependents of retired workers

- 6 million survivors of deceased workers, & 

- 8 million disabled workers & dependents of disabled workers.

During the year, an estimated 184 million people had earnings covered by Social Security and paid payroll taxes on those earnings. Total program cost in 2024 was $1,485 billion. Total income was $1,418 billion, which consisted of $1,349 billion in non-interest income and $69 billion in interest earnings. Trust fund reserves held in special issue U.S. Treasury securities declined from $2,788 billion at the beginning of the year to $2,721 billion at the end of the year. 

Under the Trustees’ intermediate assumptions, Social Security’s total cost is projected to be higher than its total income in 2025 and all later years. Total cost began to be higher than total income in 2021. Social Security’s cost has exceeded its non-interest income since 2010. 

Considered separately, the OASI Trust Fund fails the test of short-range financial adequacy, but the DI Trust Fund satisfies the test. The OASI reserves are projected to become depleted during 2033 under the intermediate assumptions. The DI reserves along with projected program income are sufficient to cover projected program cost over the next 10 years.

Expressed in present-value dollars discounted to January 1, 2025, the open-group unfunded obligation for OASDI is $25.1 trillion over the 75-year projection period 2025-99. This is $2.5 trillion more than the measured level in last year’s report of $22.6 trillion over 2024-98, discounted to January 1, 2024. 

The actuarial deficit increased significantly in this year’s report primarily due to: (1) the implementation of the Social Security Fairness Act, (2) the extension in the assumed year the ultimate total fertility rate is reached, and (3) the reduction in the ultimate assumption for the ratio of total labor compensation to GDP. These changes are described in detail in section IV.B.6 of the report.

To illustrate the magnitude of the 75-year actuarial deficit, consider that for the combined OASI and DI Trust Funds to remain fully solvent throughout the 75-year projection period ending in 2099: 

• revenue would have to increase by an amount equivalent to an immediate and permanent payroll tax rate increase of 3.65 percentage points to 16.05 percent beginning in January 2025; 

• scheduled benefits would have to either be reduced by an amount equivalent to an immediate and permanent reduction of 22.4 percent applied to all current and future beneficiaries effective in January 2025, or by 26.8 percent if the reductions were applied only to those who become initially eligible for benefits in 2025 or later; or 

• some combination of these approaches would have to be adopted

If substantial actions are deferred for several years, the changes necessary to maintain solvency for the combined OASI and DI Trust Funds would be concentrated on fewer years and fewer generations. Significantly larger changes would be necessary if action is deferred until the combined trust fund reserves become depleted in 2034. For example, maintaining 75-year solvency through 2099 with changes that begin in 2034 would require: 

• an increase in revenue by an amount equivalent to a permanent 4.27 percentage point payroll tax rate increase to 16.67 percent starting in 2034, 

• a reduction in scheduled benefits by an amount equivalent to a permanent 25.8 percent reduction in all benefits starting in 2034, or 

• some combination of these approaches

* * *

The unfunded obligations described in the Trustee's report came about due to substantial demographic shifts that saw the number of workers per beneficiary fall from 16.5 in 1950 to 2.7 in 2024 with continuous declines projected as lower-birth-rate generations replace workers of the baby-boom generation.  The ratio of workers to beneficiaries reaches 2.3 in 2040, when the baby-boom generation will have largely retired, & will generally decline thereafter to about 2.0 due to increasing longevity.

The unfunded obligations came about because of the demographics detailed above - but these unfunded obligations were caused by an oblivious citizenry that let short term politicians tell them they would never let anyone touch their Social Security benefits.  The demographics are a natural phenomenon.  The politicians are master manipulators who just hope to be out of office when their constituents realize the imminence of one of the painful solutions detailed in the report falls on them either as an unsuspecting senior citizen ripe for benefit cuts or as a worker who will see their Social Security payroll tax rate increase over 34% applied to every dollar up to $184,500 in 2026, such sum increasing thereafter. 

In addition to increased payroll taxes the unfunded obligations will be paid by today's children in the form of a markedly decreased standard of living such as the inability to buy a house or inability to send their kids to college - we are off to a terrible start regarding both of them already.  There is no leadership in either party willing to solve our problems.  Democrats are more interested in funding boondoggles like the Green New Deal where sea levels might increase millimeters during the next 100 years rather than strengthen Social Security which will have the problems described above become more noticed during the next presidential election.  Republican Members of Congress are only too happy to take marching orders from Trump whose political career should end @ age 82 in three years leaving these poor fools holding more than one bag.

In answer to the charge that Congress needs to work together better, the late Oklahoma Senator Tom Coburn said that Congress is working together way too well – that is why the country's financial problems are not being solved as described above.  In essence we have One Big Government party with Democrat & Republican wings whose jobs are so rosy Members have to be carried out of office on a stretcher.

Every politician knows that Social Security, Medicare, Medicaid, other entitlements, & interest on the national debt comprises @ least two thirds of the federal budget.  And yet every congressional charade @ financial responsibility focuses on cutting the remaining one third as if therein lies the problem.  And even this pretend effort never really cuts anything in the here & now but rather slows increases on future spending that still increases.

There are tens of trillions of dollars in unfunded entitlement obligations that never appear on the government's balance sheet but these are liabilities just like the national debt.  Although the national debt & unfunded obligations are distinct financial concepts, they are cumulative with each adding to the government's total liabilities.  The national debt represents money the government borrowed in the past & owes with interest to its creditors, while unfunded obligations are projections of future financial commitments for which there are insufficient assets or dedicated future revenue to cover the promised benefits.  According to Professor Alexander William Salter of Texas Tech University the present-value costs of these liabilities range between $100 & $200 trillion - equal to one to two times the world's GDP.

This bill will start to come due in 2033 when the unfunded obligations are accounted for by large payroll tax increases or real cuts in benefits.  The burden will not ease on all of us, one way or another, until it is paid off.

The Social Security problem has worsened from long term neglect by the politicians & indifference by We the People of the United States for decades, thereby showing it is getting harder by the day to find people who understand the issues they are fighting for or should be fighting against.

Reference Post - The Solution To Social Security's Funding Problem