A lot can happen between Now and 2060
The “Bad Cat” (el gato malo) has been reporting on the upcoming social benefits crisis. But government auditors who portray the future often get things wrong, and more often than not, they end up presenting a picture that is too rosy.
This is presumably so as not to scare people or shock them too much by portraying the “business-as-usual” situation. But if the last 23 years of data are used in order to develop a regression model to predict national default on US retirement benefits, here is how it’d look:
This model presumes that behaviors won’t change in response to the increasingly-dire consequences. It presumes that compensatory responses won’t happen. Due to our appalling history, it is not too much of a stretch to presume further attempts at kicking the can down the road.
It can be logically assumed that we never make it to the orange line, because people will not become willing to work for the entire retirement of a stranger, beyond working to support themselves and their own families.
The two main ways that we will fail to make it down to the orange line are:
Unprecedented government reform (e.g., burn over half of the 188,000 pages in the Code of Federal Regulations; cut over half of all government spending; etc.)
Complete economic collapse (national bankruptcy)
The evidence suggests that the USA needs to restore economic freedom to levels not seen in at least half a century. The result of failing to restore economic freedom will be our own undoing.
Critics & Detractors
Critics and detractors may go to great lengths complaining how this post is too short, and how it misses key details like the wave of Baby Boomers retiring. But nuances such as the timing of the wave of Baby Boomer retirements are ignored here for the same reason that it is not important to know the exact temperature in Hell (it is only important to know if you burn up).
The only requirement is to get the message across that the current path is unsustainable, and this doesn’t require knowing the exact date of sovereign debt default, or the exact date of collapse — given assumptions about Baby Boomers, or what-have-you.