2022 Social Security Trustees Report

Dale Coberly has written on Social Security numerous times over the years. The Northwest Plan which he developed was recognized by the SS Administration as being a potential solution to a shortfall in SS benefits. Dale briefly describes below how the solution might work in resolving the SS shortfall. Just a heads up. I am not sure if Dale will give a lengthier report.


The 2022 Social Security Trustees Report was released a few days ago.  So far the response has been fairly muted, the usual suspects repeating the same misrepresentations they have been repeating with every Report over the last ten years or more.

The Facts in the Report which go undiscovered by those who don’t “do the math” are:

We have reached “short term financial inadequacy,” which means that within ten years the Social Security Trust Fund is projected to fall below the prudent reserve of 100% of the following year’s scheduled benefits.

This is not as bad as it may sound.  We can still avoid the Trust Fund actually “going broke” by raising the payroll tax one tenth of one percent each year until income again balances outgo.  One tenth of one percent is about one dollar per week for the average worker in today’s money.  This is so tiny no one would notice it, much less feel it.

Or we could raise the payroll tax for each worker about one and one half percent “immediately and permanently,” which would balance Social Security funding for the rest of the century.  This would be noticed, but not felt.   Or we could wait until 2035 and raise the tax about 2%, which would keep Social Security “solvent” as far as the eye can see…over the infinite horizon.  This would be noticed and felt..for about two weeks until people got over the shock.  By that time their pay in real terms will have increased by about ten percent or more, meaning they will have more money to spend after paying for their basic needs for future retirement than they have today.

What is different about this year as opposed to previous years when the same one tenth of one percent increase per year would have solved Social Security’s financial “problem” forever, is that now the one tenth of one percent per year will NOT bring SS accounting out of “short term financial inadequacy” for a longer time than the Trustees consider prudent.  This does not mean that full benefits could not be paid, but it does mean there would be some danger that some economic emergency would require an immediate larger than one tenth percent increase, or even borrowing enough from the Treasury to tide the program over the hard times.  These are political dangers not financial dangers.

However, since politics and public hysteria are real facts of life, it would probably be better to raise the payroll tax, say, two tenths of one percent for a few years until the “short term insufficiency” is resolved. Two tenths of a percent would be about two dollars per week for the average worker.  He won’t notice that much either.

I am sending this today because I think the word should get out before people forget the Trustees Report.  I may have more to say about exactly how to avoid the “insufficiency” entirely. Earlier is better, cheaper, and less politically dangerous than later.  But it will need somebody to do something.