Reason Podcast

How Secure is Social Security? A Debate

Gene Epstein and Teresa Ghilarducci debate whether the social security trust fund exists or is merely an accounting fiction.


Given Social Security's nearly $3 trillion trust fund, the system cannot add to the federal deficit.

Today's podcast features a public debate hosted by the Soho Forum in New York City on June 17, 2019. It featured Teresa Ghilarducci, a labor economist at the New School for Social Research, and Gene Epstein, the director of the Soho Forum. Reason's Nick Gillespie moderated.

It was an Oxford-style debate, in which the audience votes on the resolution at the beginning and end of the event, and the side that gains the most ground is victorious. Epstein prevailed in the debate by convincing 35 percent of audience members to change their minds.

Arguing for the affirmative was Ghilarducci, whose 2018 book, Rescuing Retirement, advocates individual guaranteed retirement accounts for workers. Ghilarducci's 2015 book, How to Retire With Enough Money, is a practical guide to financial security in retirement. Ghilarducci is the director of The Schwartz Center for Economic Policy Analysis, a think tank that studies the government's role in the economy.

Epstein argued for the negative. Epstein is the Soho Forum's director and the former economics and books editor of Barron's. His last published book was Econospinning: How to Read between the Lines when the Media Manipulate the Numbers. He has taught economics at the City University of New York and St. John's University, and worked as a senior economist for the New York Stock Exchange.

The Soho Forum, which is sponsored by the Reason Foundation, is a monthly debate series at the SubCulture Theater in Manhattan's East Village.

Music: "Modum" by Kai Engle is licensed under a CC-BY creative commons license.

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  1. I don’t have time to listen to the debate but I assume one of the participants pointed out that the SS ‘trust’ funds have been borrowed and spent on other government programs, most of which do not generate a return on investment. To pay off the bonds, the government must either raise taxes or cut other government spending – exactly what the government would do if there were no trust fund – which there isn’t.

  2. Of course it doesn’t actually exist. The whole purpose was to build up a pot so social security could weather the baby boom retirement without having to raise taxes or borrow, what with ~2.5 workers per retiree atm.

    Yet government spent it already so when it comes time to withdraw, they will have to increase taxes or borrow it. Since the former will not happen, they will borrow it, defeating the purpose of it.

    The only difference between parallel worlds with a trust fund and none is that with the trust fund they will have to laughably borrow slightly more than without it due to interest and overhead.

  3. The primary issue didn’t come up until the audience question at 57 minutes and it’s still not clear!

    Do the published deficits included revenue generated by Social Security? I thought not, but then Gene Epstein mentions “Raiding the lockbox” to create a surplus.

    If the deficit calculations in the past have not included social security net income, then future ones will too and the won’t be an effect on future deficits. Likewise, if the government budget has included Social Security income, then it will affect the deficit.

    If Social Security has been effectively sandboxed then intra-governmental loans do matter and are valid and there is a trust fund.

    1. No there isn’t a trust fund,

      It is an accounting fiction.

      The federal government is all one economic entity. The Social Security Administration is not some separate entity unto itself.

      Real trust funds contain actual assets which are claims against unrelated third parties – investments in stocks, bonds, etc.

      The federal government has spent the FICA taxes on anything it wanted to and has written itself a bunch of IOU’s. An IOU in the hands of it’s maker is not an asset or investment and represents nothing of any actual value. It doesn’t work that way for any or person, company or organization and it doesn’t work for the federal government either. There aren’t any “special” principles of economics for the federal government that don’t apply to anyone else.

      1. All accounting is a fiction. It’s just rules made up by people to organize financial information.

        The question is, was the income of SS counted when calculating the deficits (and rare surpluses) of past years or not? If it was not counted, then paying back the “IOUs” shouldn’t affect the deficit going forward. Otherwise you’re counting it twice.

  4. SS is very secure, unfortunately. The government will either just jack up the income max subject to the tax, or just pay the shortfall out of the general fund (i.e., borrow more). Either way I’m paying for it.

  5. Nothing is secure. Everything we are seeing, speaking or writing going to Google and Facebook. They know most of the things about us. Security is myth.

  6. I think the problem you’re experiencing is that leftist politics, a la Lenin, is a combination of the conspiratorial and the imbecilic. The conspirators concentrate on producing activists that infiltrate the media, diversity administration and local government. They act as the vanguard and part of their strategy is to conceal their motives under the language of diversity, equity and inclusion. The other side are the left wing imbeciles, the modern day proletariat, who are satisfied that their support of leftist policies equates to a moral and intellectual superiority that substitutes for actual inquiry or rational argument. The people, for example, that applaud the Green New Deal and the simultaneous outlawing of nuclear power on the basis of some crap about Western Imperialist Patriarchy etc. So if you’re the first type, you just lie and if you’re the second type you’re too stupid or brainwashed to see the bigger picture

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