When the creditors are bond holders and the Social Security fund, what is the mechanism for getting the creditors to take less?
The Federal Reserve can certainly take less.
They created the money out of thin air, and they can make it disappear also.
Perhaps a mechanism needs to be created.... It is a sound business policy that works at the micro level. Worth a try.
No Cost of Living increases (not "raises" since you actually realize no added benefit) is already in effect for Social Security, which by the way, is merely the beneficiaries recouping the money the government FORCED them to contribute.
Flemming vs Nestor: There is no defined right to SS.
regarding bonds, how do you make future generations pay what they did not agree to? it will be ugly. The only question in my mind is do we recognize we cannot service our obligations and restructure the debt in as orderly manner as possible, or carry on until a black swan event overtakes us. Think Puerto Rico without US backstops.
When faced with the prospect of less or nothing, less seems like a good deal.
Very easy actually. Since the government owes it to the government they just dont pay it. Do you realize that the government owing the government is simply an accounting fiction? Bonds held by SS must be paid back by the US government who must get the money by using taxes or borrowing.
There is no trust fund the bonds mean nothing. Today’s SS recipients get their money directly from today’s workers. If there isnt enough money to go around then either benefits get cut or taxes go up. In other words SS is just like any other welfare scheme. Take from one to give to another to buy votes.
The vast majority of Americans have never been given the opportunity to face this choice. Corporate greed prevents company execs from facing their OWN 25% pay cut, so they can't imagine their workforce would happily take a 25% pay cut if it keeps the factory from moving to Mexico or China.
Everyone in America, and I do mean everyone (even those on minimum wage**), could handle a 25% pay cut. But most people are so selfish, they won't even talk about it.
**And to save repeated back and forth on this: This country hasn't known hardship since WWII, let alone The Depression. Low-income families could choose to combine households to save housing expenses -- but they don't, because they think they are entitled to owning and living in their own home. Hispanics, Vietnamese, and other ethnicities often combine families into one household to save money. Every low-income group could do the same. But the Democrats believe no one should "have to" share a roof in America. For me, it's simple math. If you can afford your own roof, you can have your own roof. If you can't, then you can't. Same with a Lamborghini.