An economist thinks US is bankrupt: What it means for retirement

&quot;When a friend on the brink of retirement was planning to take Social Security before drawing money from his 401(k) plan, Kotlikoff persuaded him to reverse his plan. &quot;<p>Advising someone to defer withdrawals so that they have a bigger benefit (unfunded and unable to be paid by a bankrupt government), means maybe he&#x27;s not so convinced the US is bankrupt.

This is a strange article in that probably 5% of the sentences therein are actually dedicated to the meat of the headline and the rest dedicated to promoting his company which helps with the stated problem. I wish I could actually see the article debate his points instead of trying to sell me something.

Worst case for social security is that no funding changes are made and payouts stabilize to around 70% of what was promised. Very bad for a lot of people but far from the disaster that is many state&#x27;s pension systems.<p>Medicare on the other hand...

Debt is about trust. Japan has the highest debt to gdp ratio, but that’s not a problem because we trust it. With enough trust you can go pretty far. There are a lot of trust factors for the US, like its military or the petrodollar.

&gt; An economist thinks US is bankrupt: What it means [...]<p>What it means is “the economist doesn&#x27;t know what ‘bankrupt’ means or understand how public finance works for an sovereign entity whose debt is primarily denominated in its own currency and probably shouldn&#x27;t be taken seriously on anything related to it.”<p>Or, more likely, “the economist knows all this quite well and is engaging in political&#x2F;commercial propaganda that relies on public ignorance.”

I&#x27;m 34 now. I have absolutely no expectation that there will be a social security system to speak of in 2049. Quite frankly it seems insane to me to expect that it would still be around.

So long as the rest of the world keeps buying US debt they will keep trucking on. The US is too big to fail: nobody can afford that house of cards to implode.