I’m currently reading the book “The Psychology of Money” by Morgan Housel. It’s not so much about how to use what money you have to obtain wealth, but rather on how people emotionally act and how that affects their ability to become wealthy. It’s really an interesting psychological study of how people really act on their emotions rather than objective analysis.
One of the points that I read last night was on how pessimism outweighs optimism in people’s reactions. We see it all the time. That’s why people tend to make poor decisions. They’re acting on their emotions. If you look at the news on many of the news channels, they will emphasize the bad things happening, and very little optimistic stories.
I’m a moderator for a group of folks heading to Alaska, and far more post are about how bad the roads are or how they can’t find fuel. You don’t see very much about the exciting and beauty that you see on the way up north - that is until they’re actually making the trip. Negativity sells. I was actually told once by a less than knowledgeable soul that I needed to carry 10 gallons of extra fuel because “They don’t have gas stations up there, ‘ya know!”
Bad news is a strong ‘click bait’ because it creates pessimism. The news streams (and YouTubers) are all trying to get income and the more clicks they generate, the more income they can command.
All of the talk about SS running out of money is ‘click bait’. It’s all about creating pessimism because that will drive folks to their point of view. It’s true that we’ve recently had to tap more into the fund than we did earlier - mainly because the baby boomers are currently retiring, and in 15 years it would be considerably smaller than now. But in 15 years most of the baby boomers will have passed. The baby boomers were working in one of the largest economic expansions in the USA, so naturally provided greater income into the SS fund, and the fund grew. And upon their retirement, it did create an imbalance between outflow and inflow, causing the fund to shrink. But after the bulk of the boomers pass, it should rebalance.
The SS fund is quite large, and is actually growing. Here is the recent report from the SS administration.
https://www.ssa.gov/policy/trust-funds-summary.html
You might notice that in 2022 the growth of the SS fund was $-56B, but in 2023 it was $-22B. Yep the fund shrinkage was reduced by 36 Billion. At that rate we should reach a balance in just a couple of years.
But in any case as wise folks told Chicken Little - “No, the sky is not falling.”
