The federal government faces an enormous fiscal challenge. Deficits and debt are both far higher than they should be, and early in the 2030s — when both Social Security and Medicare are projected to become insolvent — the budget faces a day of reckoning. Taxes must increase, or spending must be cut.
But a new analysis of Social Security reform options from the University of Pennsylvania’s gold-standard Penn Wharton Budget Model shows there are two ways to address the debt: the hard way and the easy way. Economic growth is a dimension that Washington’s usual scorekeepers largely miss. But it opens doors for entitlement reform, both economically and politically.
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