Remember when George W. Bush tried to privatize Social Security? I was very involved in that debate, and one thing I learned was that wealthy Americans, who typically have huge sums stashed away in their pension funds and own other assets, often have no idea how important Social Security is to their families. less well-off fellow citizens. Social Security benefits account for more than half the income of many retirees, and a significant number of them have little else to live on. So it's important to be aware that one of the consequences of Donald's economic proposals Trump, if passed, could bankrupt Social Security, impoverishing many older Americans, not in the distant future, but about six years from now. And while I have assumed in the past that Social Security will be bailed out if necessary, that seems less certain in the undemocratic nation we could become if Trump wins. First things first: Social Security is a government program, counted as part of federal spending. So how can an individual program go bankrupt if the federal government as a whole remains solvent (which, Trump notwithstanding, it probably will)? The answer is that Social Security has its own independent budget. If you have proof of pay, you will see that there is a deduction for the Federal Income Tax Act (FICA), the federal payroll tax. Your company pays the same amount, and if you include the company portion, about two-thirds of Americans pay more in payroll taxes than income taxes. Most of this payroll tax revenue goes to Social Security. (The rest finance part of Medicare.) This system, in which contributions from working-age Americans pay for benefits for the elderly, has come under pressure from an aging population, which has increased the proportion of beneficiaries with respect to workers. But everyone had long known that baby boomers [los nacidos durante la explosión demográfica posterior a la Segunda Guerra Mundial] Sooner or later they would stop contributing and start withdrawing money, so, as early as the 1980s, measures were taken to shore up Social Security's long-term finances. These measures included increasing the payroll tax rate, linking benefits to income tax, and gradually increasing the age of access to all benefits from 65 to 67. These measures allowed Social Security run large surpluses over a couple of decades and accumulate a trust fund that could be used to help pay benefits once the baby boomers began to retire. The plan was to keep the system actuarially sound for 75 years, but the solution appears to be falling short, largely due to rising inequality. Congressional Budget Office projections indicate that, under current rules, the trust fund will be depleted in 2034. At that point, the Budget Office estimates, benefits would have to be immediately reduced by 23%, and possibly more in subsequent years to match income, unless something else was done to close the gap. Until recently, I assumed that something would indeed be done to maintain retiree benefits; After all, the elderly vote, and there would be a huge wave of protests against politicians who decreed a large reduction in their income. But Trump has now made me rethink that premise. As a new report from the Committee for a Responsible Federal Budget (CRFB) points out, Trump has introduced multiple proposals that would undermine Social Security's finances. Among them, exempting Social Security benefits, tips and overtime payment from taxes. And perhaps less obvious, Trump's tariffs would cause prices to rise by increasing Social Security's cost-of-living adjustments. And deporting immigrants living in the country illegally – many of whom pay payroll taxes – would make the situation even worse. The CRFB estimates that these policy actions would cause the trust fund to be depleted in fiscal year 2031, and as already We are in fiscal year 2025, that is only six years away; benefits payable would also fall off a steeper cliff, immediately declining by around a third. And if you ask me, even these numbers are overly optimistic, because they don't take into account the economic chaos that Trump's tariff and deportation policies would likely create. However, as I've said, in the past I've assumed that if the fund fiduciary runs out, when it runs out, Congress and the president will do whatever is necessary to maintain benefits. Why isn't that still my default hypothesis? One answer is that Trump's plans would make the hole in Social Security's finances much larger, while weakening the economy and adding trillions to the national debt. This would make it more difficult to get the money for a Social Security bailout. But there is an even more important issue. I have argued that Social Security will almost always be protected because the elderly vote. But that's only relevant because we live in a democracy, and democracy, as political scientists like to say, «is a system in which parties lose elections.» Will the United States still be a democracy in that sense if a former president who tried to overturn the results of the previous elections – a man branded a fascist by one of his chiefs of staff and one of his chiefs of staff – regains power? And if we stop being the kind of democracy we have been, will the votes of the elderly really matter? The fate of Social Security is not my main concern if Trump wins – I am more concerned about his threat to democracy – but it is certainly on the list. Paul Krugam is a Nobel Prize winner in Economics. © The New York Times, 2024. News Clips Translation