Dedicated readers of NORA will know we’ve recently talked about how the federal deficit and national debt impact Social Security.
The nation’s finances are of course massively impactful on the future of retirement, even though seniors’ funds should already be secure. After all, those funds were faithfully paid in for decades.
But there’s one possibility beyond a potential government shutdown that very few people talk about. What if the U.S. defaults on its debt? This catastrophic scenario would be a true worst-case event. Is it a possibility?
How a Debt Default Puts Social Security at Risk
The effects of a government shutdown can impact spending — but only in a temporary sense.
Shutdowns have happened multiple times in the country’s history. Essential workers stay on the job, some checks keep going out, and non-essential items are ceased until Congress acts.
But what happens if the U.S. defaults? This would be a first-ever event, and would see the U.S. declaring it could no longer afford to pay its creditors. Since it would be the first of its kind, this event brings with it a great deal of uncertainty.
There’s no guarantee that Social Security payments would go out at all. This would be an unacceptable situation for America’s retirees. Debt default could very well lead to the program’s demise.
Other groups like veterans and military families may also see their benefits stop. However, members of Congress would still be paid — though motions are being made to change this as we speak.
Let’s Protect Social Security for Seniors Today and Tomorrow
A government shutdown would put retirement security in jeopardy for seniors today, and for future retirees who are paying into the program now.
We all deserve our hard-earned money back. This isn’t to say the debt situation is sustainable or that major changes don’t need to be made. But it is to say that, no matter what direction policymakers go, Social Security should remain a priority.
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