Pod Insights Optimist Economy Young Americans Should Be Raising Hell About Social Security About this episode Nobody has more riding on any changes to Social Security than people under 40. The trust fund is currently projected to run dry in the fourth quarter of 2032, but it could be sooner. Every election, starting in November, selects the lawmakers who will shape the program’s future. Neglecting to fix its finances will mean an automatic 22% cut to everyone's benefit. But for Millennials and Zoomers, what’s at stake isn't your elders’ monthly check — it’s the only life insurance, disability insurance, and old-age poverty insurance guaranteed to follow you through every job you'll ever have.
Chapters:
1:21 Announcements — Unbleeped feed, subscribe reminders.
2:23 Retcon — Seed OK savings accounts follow-up.
4:36 Terms & Conditions — Social insurance vs. private insurance.
8:42 Big Pilcrow — Under 40? Time to tune in to the Social Security debate.
11:51 Youth Skepticism — Why young people have always doubted Social Security, and how that's politically exploited.
16:56 OBBA Impact — How the One Big Beautiful Bill Act cut Social Security's revenue.
18:37 Immigration Trends — Deportations and lower immigration also hurt.
21:11 Elections Have Begun — Social Security as a live political battleground.
22:35 First Beneficiaries — What studies of early recipients tell us.
30:36 Otherwise Uninsurable Risks — Death, disability, savings, longevity, inflation.
33:17 Paid Family Leave — Could Social Security's model extend to paid leave?
34:21 Claim Ownership — Youth should own this program.
37:08 Cuts by Geography — Rural states will get hit hardest if cuts come.
38:27 Executive Orders — Casting ages, cosmetic disclosure.
40:22 Spiritual Sponsors — World Cup, Jeopardy! triumph.
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 Mitt Romney and Ted Kennedy were about as different as two politicians could be. The lanky businessman and the stout old senator, the conservative darling and the liberal icon. But did you know they once teamed up to tackle an elusive challenge: universal health care?
0:16 Speaker 01 This is a politician's dream.
0:18 Speaker 00 In season four of the Big Dig podcast, we tell the story of Romney Care and the odd couple alliance behind it. Find Mitt and Ted wherever you listen.
0:30 Speaker 02 Getting a note from production that this falconry metaphor might play because Ren Faire is really big with the youth right now.
0:46 Speaker 02 Hello and welcome to Optimist Economy. I'm economist Catherine Ann Edwards.
0:49 Robin Rauzi? I'm editor Robin Rousey.
0:51 Speaker 02 On this show, we believe the US economy can be better, and we talk about how to get there one problem and solution at a time.
1:03 Robin Rauzi? And today on Optimist Economy, what are we talking about, Catherine?
1:06 Speaker 02 Social Security. Social Security. We're talking about social security.
1:10 Robin Rauzi? It's a birthday gift to you. It's Catherine's favorite topic. Is this like our fourth social security episode?
1:17 Speaker 02 I mean, if we need to count, we can, but doesn't it feel like there's never enough?
1:23 Speaker 02 Okay, sorry, we're talking about social security for the young. We just got the release of the trustees' report from social security that tells us how long until the trust fund is depleted, and that is in 2032, which means that we have entered the social security elections. If you're voting for a senator right now, you are voting for a senator that will have to vote on social security. So this isn't speculative anymore. We are in social security elections, and so we wanted to do a voter's guide to social security.
1:50 Robin Rauzi? Okay.
1:51 Speaker 02 Especially new, young voters who are maybe naturally skeptical of the program.
1:56 Robin Rauzi? Sounds good. Okay, announcements.
1:59 Speaker 02 Announcements.
2:00 Robin Rauzi? Do you have any announcements?
2:01 Speaker 02 I don't have any announcements.
2:03 Robin Rauzi? I just have one announcement, which is that if you are a person who likes to hear an economist swear, we have a feed for you.
2:12 Robin Rauzi? If you just heard a loud beep, you wouldn't have to if you were listening to the show on YouTube. So there you go. I did that at the behest of several listeners who keep asking if we have an unbleeped version of the podcast.
2:28 Speaker 02 What's funny is how much I try not to swear when we record, but it's, I have a mouth. I mean, I curse like a sailor. That's just who I am.
2:37 Robin Rauzi? Andy is typing in all caps. Please subscribe to our YouTube channel. You can also comment on YouTube about the specific episode. This is also maybe a good reminder to say you could leave a review for us on Apple Podcasts. That's also handy. Retcon?
2:53 Speaker 02 Retcon.
2:54 Robin Rauzi? And if you're new here, if you're new here.
2:56 Speaker 02 If you're new here.
2:58 Robin Rauzi? I'm sorry.
3:00 Speaker 02 I mean, welcome to the jungle. If you're new here, we start off the show with a segment called Retroactive Continuity, where we try to fix things that we said before but already aired. Or just give updates and reflections on past episodes.
3:14 Robin Rauzi? Exactly.
3:15 Speaker 02 I have one bit of retroactive continuity, which is that in episode six of this season, Can $1,000 at Birth Make Us a Country of Savers? I mentioned that the child savings accounts that was in the One Big Beautiful Bill Act and is in the process of being ruled out right now, has been piloted successfully on the state level in Oklahoma. And they're called SeedOK accounts. And SeedOK was very demonstrative of how important auto enrollment is. Well, kind of an update to that is those kids in SeedOK turned 18.
3:54 Robin Rauzi? Recently.
3:54 Speaker 02 Recently. And we now have data on what they did when they turned 18. About 27% spent the money when they turned 18. And about 2/3 of those who spent money, it went to post-secondary education. And a lot of them, it was the full balance of their account.
4:19 Robin Rauzi? And so 2/3 is like, whatever, 18, 19% of them?
4:23 Speaker 02 Yeah.
4:25 Speaker 02 On average is about 2,300 bucks. Females were 19 percentage points more likely than males to have a distribution.
4:32 Robin Rauzi? Have a distribution at all?
4:33 Speaker 02 Yes. About 43% of the distributions that went to schools, went to trade schools, or two-year schools, and 57% went to four-year colleges.
4:43 Robin Rauzi? But it is surprising that nearly three-quarters of them didn't spend it at all.
4:49 Speaker 02 Mm-hmm.
4:50 Robin Rauzi? I mean, it could be that they're waiting to see what their book bills are like in year three of college or something.
4:57 Speaker 02 So, I mean, that's kind of exactly what we wanted them to do, was to cash it out and spend it on school, so great job.
5:03 Robin Rauzi? Yeah, yeah. Great, next up is terms and conditions. Catherine, it looks like you have a real on-the-nose one, head-on.
5:12 Speaker 02 Head-on. My term and condition is social insurance. Social insurance is basically an insurance program that you participate in that is brokered by a public agency. Like, it's a government insurance program. And most of the time, it is you pay your premium through the tax system and you are legally required to participate in it. There's two ways to think about it, is how it differs from the rest of government versus how it differs from private insurance. So, you buy a phone, you decide to get, like, insurance for your phone.
5:50 Robin Rauzi? Sure.
5:50 Speaker 02 It's elective private insurance. You don't have to buy it, but you can, and if you do, you buy it from a private company. All right, then you move over one, and then we have compulsory private insurance. You have to have insurance, but you buy it from a private company. This would be like your car insurance and homeowner's insurance. One step over is social insurance. It's compulsory, you have to have it, and it's run through the government.
6:12 Robin Rauzi? Mm-hmm.
6:13 Speaker 02 And in the US, that's social security. It's also unemployment insurance. And it's the premium, rather than being paid like a check that you write every year, it's just lifted right out of your paycheck through payroll taxes. That is your premium, and then if you make a claim, it'll be based on the premiums you paid in. The other way to think about it is like where it comes from relative to other government spending. So, if you think of a program like food stamps, the way that you pay for it is through general revenue.
6:41 Robin Rauzi? Just comes out of regular tax dollars, yeah.
6:44 Speaker 02 Yeah, you have income taxes, and some of it you spend on defense, and some of it you spend on, you know, food stamps. And to be eligible for food stamps, you just have to meet some set of conditions. And it's really a transfer of like, people are paying taxes in and you're getting the benefit out. Social insurance doesn't rely on general revenue. It relies on the taxes collected through the payroll system. Your, your income tax does not support social security.
7:08 Robin Rauzi? I think this is confusing to people because they pay it as an income tax or they see it as an income tax, even though, like, to most people, I think that's a distinction without a difference.
7:18 Speaker 02 Oh, so a payroll tax is flat or regressive. Whatever you earn, you pay 6.2% for social security up to a cap. The income tax is a progressive system. So the more you earn, the higher the rate is. And it's a tax on all income, whereas social security is a tax on wage income. And there are two pots of money. One goes to Congress. One goes to the social security's trust fund. And they don't touch.
7:46 Robin Rauzi? Okay.
7:47 Speaker 02 What's yours? It looks devastating.
7:51 Robin Rauzi? Well, I stumble across these, these terms often when I'm reading The Economist, which I don't do all the time. But, but it seems like the British have like, they just have slightly different terminology for things. They organize things in different ways. But the term was economically inactive. And this is how the UK Office of National Statistics, this is how they lump together anybody who's working age, but, and is not a student, but isn't, isn't looking for a job. So this could be people who are caregiving, who are parenting, who are themselves ill. But it could also include discouraged workers, but also people who retired early. You are just economically inactive.
8:32 Speaker 02 God, the Brits are so devastating.
8:34 Robin Rauzi? I don't know. I was like, my wife isn't retired. She is just economically inactive.
8:38 Speaker 02 But like, that's not true because she buys things. Like, she's still out there buying things. Like, she's participating in the economy.
8:45 Robin Rauzi? You think it's bad to be economically inactive? I thought it means like, kind of early retired. And I was, I was pro, I was all for it.
8:52 Speaker 02 Oh, I guess, okay. I saw it as kind of like, well, that's a really mean thing and kind of an accurate thing to say.
8:59 Robin Rauzi? You don't count.
8:59 Speaker 02 Wait, why are you reading The Economist? You just, you hate yourself?
9:02 Robin Rauzi? Exactly, sometimes, sometimes I do. We'll be back in a second for the big pill crow.
9:12 Robin Rauzi? We're back for the big pill crow. The big pill crow is where we talk about a new idea. The pill crow being the symbol for a new paragraph, which is where we introduce a new idea.
9:24 Speaker 02 We got a lot of advice when we started a podcast, and one of them was, you're going to want to find an in-joke, put it into some random episode, and then talk about it for years, to the point where you don't even remember where you first said it. It just becomes part of the show. And it's a way to make sure people feel like they can't listen, you know? That was a really key piece of advice we got. Build the show to be exclusionary as possible. You're already talking about such a lightweight subject. Put some roadblocks up. The biggest pill crow is about social security.
9:55 Robin Rauzi? Right.
9:55 Speaker 02 A subject we have talked about before, but it was pointed out to me by a listener that we do tend to start maybe three-fourths of the way through the social security book, where there's lots of basic like, so how does it work? And I'm like, anyway, about 10 to 99 income taxes. Someone said social security to me, which is an excuse for us to do another episode about it.
10:17 Robin Rauzi? I think that was me, right? I said, yeah. But I do think you make a good point, which is that as you approach retirement, social security becomes really vital to you and you begin to really think about it and scrutinize it. But, you know, I don't think people start to think about retirement, maybe as early as they should. But if this is going to become an election issue in the next two election cycles, we want everybody to understand what social security is, how it works, why it matters to you, and why people need it.
10:45 Speaker 02 Exactly, exactly. And what I want to get across in this episode specifically is why social security is so important to young people. Not like in a nanny state of like, one day you'll appreciate this, but more of a like, it's important to young people today that social security is currently working, even if they're not getting the cash benefit. Like, you want social security in our economy and society. It is good for you. And frankly, you have the most to lose if social security goes away.
11:20 Robin Rauzi? Yeah.
11:20 Speaker 02 Okay, so that's the goal. Let's start with some context, which is? Social Security is 91 years old. There was a Social Security Act of 1935. There has been extensive polling on Social Security over its nine decades of existence. And what's interesting about it is that Social Security has always been really, really popular. But it is also the case that young people are skeptical of Social Security being there.
11:49 Robin Rauzi? Sure.
11:49 Speaker 02 Also, always the case. So, so it's
11:51 Robin Rauzi? That was the case even when it started?
11:53 Speaker 02 I mean, the good polling we have on that starts, there's kind of some like gaps there because they didn't do a ton of polling on Social Security like during World War II.
12:01 Robin Rauzi? Sure.
12:02 Speaker 02 Yeah, I mean, like when the boomers were young, they were like, "Social Security won't be there for me."
12:07 Robin Rauzi? Because there's just too many of us and we're
12:08 Speaker 02 "There's too many of us and we won't get it," or, you know, "It's too far away and like the government can't do things." And now that the boomers are almost all retired, they're like, "Social Security is the most important program in the history of the world and it's amazing," right? The skepticism is a feature of the young. Over the past, I would say, 30 years, 40 years, youthful skepticism has been held up as a reason to cut it. Like, politically
12:31 Robin Rauzi? Politically, like, "Well, kids don't, the kids don't think that they're gonna get it anyway, so we might as well cut it."
12:36 Speaker 02 Some old-ass guy in Congress is taking natural youthful skepticism of something 50-plus years in the future that you're just not 100% convinced on as evidence that we need to cut the most beloved program in history. That's where we are. That is one of the most consistent cases that they make is, you know, young people don't want it. And young people don't want it is a
13:01 Robin Rauzi? It's different than when people don't
13:03 Speaker 02 No, but it's like this, this is an echo chamber of like, young people don't want Social Security. They know they can make more money in the stock market and they don't know what'll be there for them. So like, young people don't want Social Security. It's an artifact of an older age. So this, this like youthful skepticism is vitally important to the political economy of Social Security because it's often manipulated in political debates.
13:23 Robin Rauzi? Well, they, they absolutely say things like, "If you took 6.25% of your income and invested it, this is how much money you would have."
13:34 Speaker 02 Because no one's ever lost money on the market before and you won't either.
13:37 Robin Rauzi? Right, right, exactly. Do you think that this is also, because when Social Security started, most people didn't have access to the market. They didn't have money in the, in the stock market. Not that everybody does, but far more people do now than did probably in the 40s.
13:55 Speaker 02 Yes, and that's partly a function of that you wouldn't need to invest in the stock market if you had a pension.
13:59 Robin Rauzi? Oh.
14:00 Speaker 02 This point of you can make more money in the stock market.
14:04 Robin Rauzi? Yeah.
14:04 Speaker 02 Is not something you would say if you were in the era in which like 75% of workers had a defined benefit pension plan from their employer. The idea you'd be like, hey, so you could just go gamble in the stock market and make more money. Like, that argument only makes sense in a world where employers have completely shed the risk of your retirement savings that they used to take on. They have shed it, they have put it on to you, and now people are like, you know what's awesome about that? We shouldn't have social security either. Like, my god. Like, how much do you think one worker can do?
14:35 Robin Rauzi? Especially if their wages are stagnating, yeah.
14:38 Speaker 02 Yeah. And it's not enough. Like, it should, the benefits should be higher, but they're good, but they're not, on average, they replace around 40% of people's earnings.
14:48 Robin Rauzi? Yeah.
14:49 Speaker 02 So, so I want to do a quick, like, timeline of what is going to happen to social security and why we, why these elections matter now. And then I want to do, like, a pitch to young people about social security.
15:03 Robin Rauzi? Who is the youth in this?
15:05 Speaker 02 I would say under 30. I'm sure someone's 29 and a half and they're like, [bleep] yeah, I'm the youth.
15:11 Speaker 02 And then there's some guy who just turned 30 who's like, this is a sad day for me.
15:14 Robin Rauzi? This sucks.
15:15 Speaker 02 I mean, from a social security's perspective, I think the youth goes up to like 40.
15:19 Robin Rauzi? I was gonna say, if you've been told that it won't be there for you, I can tell you the youth extends to age 56.
15:26 Speaker 02 All right, all right, so let's do millennials and zoomers.
15:30 Robin Rauzi? All right, so the social security trustees just came out with this report saying that the trust fund will be depleted in, I think it's the final quarter of 2032. It used to be 2035, and just in the last few years, it's gone to 2032 now.
15:46 Speaker 02 One confusing part is that there's two trust funds. The old age and survivors insurance trust fund, which pays out most of the benefits that you've heard of, and then there's the disability insurance trust fund. And the reason why there's two trust funds is because these programs were created 21 years apart.
16:01 Robin Rauzi? Right.
16:02 Speaker 02 So when they started disability insurance, they started a new trust fund. The old age trust fund that pays retirement benefits.
16:08 Robin Rauzi? Right.
16:09 Speaker 02 That is expected to be depleted in the fourth quarter of 2032. The reason why this is huge news is because it's moved into 2032, which means it's moved up an election cycle.
16:19 Robin Rauzi? Oh.
16:21 Speaker 02 That is why I think there's so much news around it. But the Disability Insurance Trust Fund is actually expected to be depleted never. It's solvent over the 75-year window. Now, it's a lot smaller, but the kind of assumption is in 2032, Congress probably won't have a solution. They will turn to the Disability Insurance Trust Fund and basically take from the disability.
16:44 Robin Rauzi? Read from that.
16:45 Speaker 02 Yeah, like they'll basically redirect the Disability Insurance Trust Fund to old age benefits. They did this in the 1980s because we've been here before. Social Security's old age fund borrowed from its disability fund to extend the timeline. And then after they reformed the program, they paid back the disability insurance fund. So if you look at the old age insurance trust fund depletion date, it's the fourth quarter of 2032. That is during, that is like.
17:09 Robin Rauzi? That's like election day.
17:10 Speaker 02 It's election day, right? If you look at the combined trust fund, it's 2034. So I think experts like myself, we tend to look at the combined trust fund. But the first big thing has to happen is 2032. The reason why it moved up is no good, right? The one big beautiful bill act reduced Social Security's revenue.
17:30 Robin Rauzi? Right. You want to talk about how that, it did that?
17:33 Speaker 02 Yeah, you've probably heard that there's a tax on benefits. If you are a current Social Security beneficiary, typically benefits aren't subject to the income tax. However, if you make a lot of money from things that aren't Social Security when you're retired, a portion of your Social Security benefits can be subject to the income tax. And if you pay taxes on Social Security benefits, it goes back into Social Security. It doesn't go to Congress.
17:59 Robin Rauzi? It doesn't go into the general fund or whatever. It just, it stays in the Social Security ecosystem.
18:04 Speaker 02 It stays in the Social Security system. The problem with this is that the level for defining high income has not changed in nominal terms since 1983. So if you made $25,000 from private retirement accounts in 1983, you probably were high income. That's not the case anymore. And more and more seniors are seeing their Social Security benefits subject to a tax. So the one big beautiful bill act did not fix or change this. What it did was it gave seniors an additional two deductions to help reduce the taxable income on the private income side so that they'd be less likely to hit the cap to have their Social Security benefits.
18:46 Speaker 02 Subject to the income tax. So this is a fresh reminder that Christopher Nolan actually designed our tax system. But it reduces the number of people who end up having to pay taxes on their social security benefits, reducing social security's revenue and accelerating the trust fund depletion. I can't think of a worse way to address this problem, but maybe I could if I tried really hard. Anyway, the other thing that's happening, in addition to changes to a tax law that only lasts through Trump's term, it ends in 2028. But the other thing that's happening is that social security relies on immigrants in more ways than one. And the changing state of immigration in the US is hitting social security.
19:27 Robin Rauzi? Because they pay into the system and rarely draw out of it.
19:30 Speaker 02 Unauthorized immigrants, people who do not have permission to be in the United States but are working, pay into social security. I mean, it's lifted right out of a paycheck for almost every worker in the United States. But they are never eligible to receive benefits based on those contributions, even if they become citizens. It's a small windfall to the program. It's not nothing. And social security gets money from it. So if that goes down, it affects social security's bottom line. The real immigration question is what happens going forward?
19:57 Robin Rauzi? Yeah.
19:57 Speaker 02 So social security makes this prediction every year of how much money will be going into the program via taxes and out of the program via benefits. And they have to make this prediction over a 75-year period. It's why we've known that the trust fund has been running out for almost four decades, because they first predicted that in 1985. And they're like, hey, we think in about 50 to 60 years, the trust fund is going to be depleted. So they make these massively long projections for finances. But part of their projections of that what happens over 75 years is based on immigration. They have to make an assumption of how many people on net are coming to the US to work.
20:40 Speaker 02 In this report, they said immigration took a hit in 2025. But they basically assume immigration goes back to normal and we have a million-plus new people coming in.
20:50 Robin Rauzi? They assume it goes back to normal when?
20:52 Speaker 02 I think in 27.
20:55 Robin Rauzi? Oh.
20:56 Speaker 02 Maybe it's 26 or 27. I don't know the exact year. But they basically assume immigration goes back to a million plus people a year, which is a very tenuous assumption.
21:05 Robin Rauzi? Very big assumption, yeah.
21:06 Speaker 02 It's not made maliciously. They're like not meant to respond to like the news of the day. Like they're very like, if we make it a-
21:12 Robin Rauzi? They're looking through the inflation like the Fed.
21:15 Speaker 02 They're looking through basically everything going on to what are the underlying long-term trends. So a like hateful year of immigration policy does not make a 75-year trend. And so that is their positioning. But if this keeps up, we won't have until 2032 because immigrants are such a vital part of social security. Those are the stakes, y'all. Do we feel like we are caught up on the trustees' report and why this is such a high-stakes moment?
21:41 Robin Rauzi? I do.
21:41 Speaker 02 Okay, 2032, the fourth quarter of 2032 is the latest we think that the Social Security Trust Fund will be depleted, which means social security elections have begun. Looking at you, Georgia.
21:55 Robin Rauzi? Looking at you, Georgia. Yeah, good point.
21:58 Speaker 02 So that's, that's why, this is high stakes. So now if you're a young person, my like more cynical, which I don't like to be on the show in particular, but my more cynical take is the conservative plan of attack is to go through young people to say you're paying for older people and they already have enough money and the boomers are wealthy and you should support benefit cuts because that's for you. And they're going to come out strong to say young people don't care about social security. They shouldn't vote on it. You should vote on other things. And boomers will be fine because they have all the money and a better economy anyway.
22:28 Robin Rauzi? Yeah, that's probably, I think if you're a betting woman, that's a, that's a good bet to make.
22:32 Speaker 02 You know, people who have had experience with social security understand, even if they don't benefit from it, why it's so important. If you were to cut off social security, we'll have an influx of multi-generational households because social security grants tens of millions of elderly Americans economic independence and old age. You want to cut that, they're not going to be dependent on the government. They're going to be dependent on their families.
22:59 Robin Rauzi? Mm-hmm. Because that was their government dependence. You just took away.
23:04 Speaker 02 You just took it away. I mean, there was some really interesting studies about like kind of the first generation of social security beneficiaries. The first benefit was paid to Ida Mae Fuller in 1940. The kind of wave of benefits after that were kind of slowly increased as you had longer work histories feeding into the benefit claiming and- There is a lot of evidence that the government transfers from social security supplanted private transfers from family. And that this enabled a lot of people to spend more money down on their kids because they were no longer supporting their parents or grandparents. I think that that is hard to resonate with people to put in this like hypothetical of like if social security were to end, young people would be by far the worse off, even
23:49 Speaker 02 if they're not getting cash, because then they lose the benefit in the future and they gain the responsibility.
23:56 Speaker 02 This is like I'm speaking to young people as a young person. So here's first pitch. Ready?
24:00 Robin Rauzi? Okay.
24:01 Speaker 02 Okay. Okay. A person retiring today in 2026 was born in 1959 and they started work in 1977. So in their work life, they've made it through six recessions, an energy crisis, the advent of computer, internet and cell phones at work, the savings and loan crisis, the dot com bubble, the housing bubble, the financial crisis, the pandemic, a 13-year period in which the total return to the S and P 500 was zero, a career that was bookended with two inflation spikes, one at the start in the early 1980s and one at the end in the early 2020s, and they exited just as tariffs were the highest in nearly a century and
24:44 Speaker 02 9% of private sector workers had a pension. That is what they lived through. Part of me is like, the poor [BLEEP]. Like, that's so much. But if you are turning 18 today, you were born in 2008, you're turning 18 today, you will not retire until 2075.
25:05 Speaker 02 On what planet would it benefit you to get rid of your insurance? Because that's what social security is. It's your insurance. Like, some guy is gonna tell you 6.2% is gonna make you $7 million in the stock market. Like, okay, when is the stock market gonna crash? When's the next correction? When's the next bubble? There's the dot com bubble, the housing bubble led to a 13-year period in which the total return to the S and P 500 was zero. One tells you how much money you can make investing in the stock market. Ask them specifically, when is the next bubble? And can I move my money right beforehand? And can you tell me right before the next bubble hits? I mean, people will tell you that you can have a better life if you don't make any mistakes in investing, in saving, in working.
25:48 Speaker 02 You never become unemployed and you always pull your money out at the right time because you won't be left holding the bag. But like, y'all, that's a lot to put on yourself between now and 2075.
25:59 Robin Rauzi? Yeah.
26:00 Speaker 02 This is your insurance. It, I mean, yes, you have grandparents. This isn't about them. This is about you. This is your insurance. I don't think people realize the risk that they face as a worker in the capitalist economy of just how many hits that they could take that they cannot possibly predict.
26:18 Robin Rauzi? Yeah.
26:18 Speaker 02 Right now.
26:19 Robin Rauzi? I mean, I'd be surprised if anybody can be looking at this economy right now and not understand risk.
26:24 Speaker 02 Well, I mean, a lot of people like, I mean, okay, I think that there's, if you're, if you're 18, you probably might have a low key understanding that you're immortal. And like, you'll never die.
26:33 Robin Rauzi? Yeah.
26:33 Speaker 02 You'll never get sick and nothing will ever happen. So I don't, I don't want to like, press too hard of like, actually that things are going to happen. But to say like, who are you going to put your faith in? Like, it used to be the case that more than two thirds of workers had a pension from their employer, and it's down to 9%. Like, you should take that as indication that your employer is probably-
26:54 Robin Rauzi? Employer is not, not, not going to be there.
26:56 Speaker 02 Not going to take care of you, so.
26:57 Robin Rauzi? And not only that, most people don't work for the one, for one employer or a handful of employers anymore. Like, the entire landscape of work has changed.
27:04 Speaker 02 And I think it'll keep changing. And so are you going to bank on the fact that you'll always have a retirement plan from work? Or, or a disability plan from work? Or a life insurance plan from work? Like, you have from now until 2075. Will every job have a long-term disability benefit and a life insurance benefit? If you don't know, then your long-term disability and life insurance benefit, the only one that is guaranteed is social security. Because I know social security will have it. I have no idea what your employer is going to offer you as a benefit outside of wages in 2070. And you don't know. So don't get rid of the benefit. You, I mean, this is like, this is the bird in hand. The bird in hand is worth like negative two in the bush. There's no birds in the bush. Employers are not holding birds.
27:49 Speaker 02 You have the bird in your hand. Is this me, am I using this metaphor correctly?
27:53 Robin Rauzi? I don't know.
27:55 Speaker 02 This is like a bird in hand is worth two in the bush? Is this, come on, this is, alright, I am looking this up. Bird in.
28:02 Robin Rauzi? But I don't think there's ever negative birds in the.
28:04 Speaker 02 Well, that's just, okay, so a bird in the hand is worth two in the bush.
28:08 Robin Rauzi? Two in the bush.
28:08 Speaker 02 Okay, it's originated from medieval falconry.
28:12 Robin Rauzi? Of course.
28:13 Speaker 02 And what I'm saying is that you don't have two in the bush. There ain't any birds in that bush.
28:18 Robin Rauzi? No bushes.
28:19 Speaker 02 There's no bushes.
28:20 Robin Rauzi? There's no birds.
28:20 Speaker 02 There's no birds in them, you're holding the bird.
28:25 Speaker 02 I'm not gonna lie, my social security chat is gonna kill me. They'll be like, what is this awful bird metaphor?
28:33 Speaker 02 Why are we talking about birds? Gathering in social security? How did you get into an extended bird metaphor?
28:45 Speaker 02 Maybe that one got away for me.
28:49 Speaker 02 But that is my pitch is that you don't know what's coming and that it's insured.
28:53 Robin Rauzi? I like it, you're gonna use the medieval, the medieval falconry metaphor to, to reach the youth.
28:58 Speaker 02 Don't let social security be the bird that flew away. But doesn't come back, because you're not adept at falconry, sorry.
29:07 Speaker 02 Really putting a heroic amount of weight on birds. Let's do some stats.
29:12 Robin Rauzi? Okay, alright.
29:14 Speaker 02 In 2025. Around 59% of private sector workers had a life insurance policy through their job.
29:22 Robin Rauzi? Sure, okay.
29:23 Speaker 02 And this would be, the benefit is like one and a half times your salary.
29:27 Robin Rauzi? Right.
29:28 Speaker 02 37% have long-term disability insurance.
29:31 Robin Rauzi? Yeah.
29:32 Speaker 02 And this will be a like fraction of your salary is paid out for some period of time. Not your entire life, I assure you. And then it bounces around, but roughly 70% of workers have access to a defined contribution plan at their job.
29:54 Robin Rauzi? 401K.
29:54 Speaker 02 Like a 401K. That does not mean that the employer contributes to it.
29:58 Robin Rauzi? Mm-hmm. It just means they have some access.
30:01 Speaker 02 They have some access to it.
30:02 Robin Rauzi? Okay.
30:03 Speaker 02 Okay.
30:04 Robin Rauzi? Why are we doing all this?
30:05 Speaker 02 So, because social security is 100. Y'all, it's a life insurance policy. It's a long-term disability insurance policy, and it's a retirement plan, and it's 100%, and everybody gets it. That's a, it's 100. That's why we have it.
30:15 Robin Rauzi? Got it.
30:16 Speaker 02 Yeah. So like, you working until 2075, in order to maintain, say, long-term disability insurance through your employer, you can't have any gaps in work, and you have to make sure that every employer has long-term disability insurance, which only 37% of them do.
30:36 Robin Rauzi? Mm-hmm.
30:37 Speaker 02 Versus, every job you ever have will be covered by social security, unless you're like a public sector worker in Ohio, they're part of like the fractional not covered.
30:46 Robin Rauzi? Like my mom.
30:47 Speaker 02 The people who aren't covered by social security are groups of workers that had existing really good retirement plans when social security was expanded, and so that was really just certain industrial sectors, like railroad workers, and then public sector employees of state and local governments.
31:04 Robin Rauzi? Yeah.
31:05 Speaker 02 How about this? Here are the five risks that are currently covered in your federal social security benefit.
31:11 Robin Rauzi? Okay.
31:12 Speaker 02 Right. Number one, you die before you reach retirement age, and you have dependents at home, either a spouse or children under 18. And if you die and you have kids at home or a spouse, they will get some social security. It has to be a dependent spouse.
31:28 Robin Rauzi? Sure.
31:29 Speaker 02 Okay. Risk two, you become disabled, you don't reach retirement age because you have a permanent disability, and social security covers you and your dependent children.
31:39 Speaker 02 Risk three, you reach retirement without enough savings to last your whole life.
31:43 Robin Rauzi? Right.
31:43 Speaker 02 Uh, you outlive your savings.
31:46 Robin Rauzi? Right.
31:47 Speaker 02 Social Security covers you. Inflation erodes your savings. Social Security covers you. Those are the five risks that Social Security currently covers. Death, disability, insufficient savings, I don't know what to call the fourth one. Like extreme old age and inflation. Cause it's a lifetime inflation adjusted annuity. You cannot buy that protection if you tried, especially the inflation adjusted lifetime annuity. Like that Social Security is automatically adjusted for inflation every year. Sometimes that adjustment's big, sometimes adjustment's small. It's probably not big enough compared to what old people spend their money on, which is health insurance and heating, but like.
32:26 Robin Rauzi? Yeah.
32:27 Speaker 02 You get an increase in your benefit every year. That's not guaranteed anywhere on the private market. So this is a truly incomparable benefits that you have.
32:37 Robin Rauzi? Yeah.
32:38 Speaker 02 So instead of someone telling you why you shouldn't be paying for it anymore, you should be telling them, actually, I want it to be bigger and better.
32:45 Robin Rauzi? Yeah, that's kind of where I expected you to go with this. You know, which is like, if we can do this for, for old people and for people who suffer disability, or for people who lose a spouse or a parent, why can't we do this for the other risks that people face in their.
33:01 Speaker 02 Well, we totally can.
33:04 Speaker 02 We totally can. Social Security is the, like, the most effective tool in the public policy toolbox.
33:11 Robin Rauzi? So you, you think of it as a, I don't know, like as a tool, as a mechanism, not as a. I think, do you think people think of it as one specific retirement program? But you're like, no, no, it's, it could be all forms of social insurance.
33:23 Speaker 02 You face risk over the course of your life that you cannot sufficiently or efficiently save for. If you can't sufficiently or efficiently save for something, you need to have insurance. If the private market doesn't find it profitable to take any old person. And give them disability insurance, that means the government needs to provide it in a social insurance system. Those five risks are like far from the only risk that people face that the private market wouldn't insure. The private market has had decades to show you it will not find some kind of private paid family leave program profitable. If it's not efficient to save for, then you need to have insurance. And if the private market won't do it, it's public insurance and that's a social insurance program. Like, to me, it's not just like, these are the things I like.
34:05 Speaker 02 Like, I don't think food insecurity is a good social insurance program. I don't think housing is a good social insurance program because it's not necessarily like a random risk that hits you. A health scare, an unemployment spell, those are, like, you needing to stay home to take care of someone, those are risks. I mean, arguably, the only one that's not really a risk is newborn leave. Because paid parental leave is not a risk, it's a choice. I could see the argument, it's just, I don't think it's the, it's the same kind of caregiving responsibility.
34:37 Speaker 02 But, yeah, I mean, it's just, it's, it's whether or not it's a risk that needs insurance. And what makes it a risk is it could happen to you.
34:44 Robin Rauzi? Right.
34:44 Speaker 02 Uh, then you need insurance. So.
34:48 Robin Rauzi? Any final pitches to, to the youth?
34:51 Speaker 02 I think that our political economy has lots of problems and is broken. And there's these like truisms that we fall back on, like, old people vote so social security would never be cut. Like, it's off your shoulders. It has been presented in the political economy world as if it is not your program. And that has got to be one of the most successful political coup d'etat conservatives have pulled off, is to convince you that this benefit isn't yours because it's old people's and they vote and it will always be okay for them. Like, I, I would not fall for it. Because this is potentially you having not just life insurance, disability insurance, and basically retirement poverty insurance.
35:36 Speaker 02 This could be the way that you get paid family leave. And this could be the way that you get better unemployment insurance in a short-term and long-term program. For you to not have ownership over it is such a win for conservatives. So don't, don't give it to them.
35:53 Robin Rauzi? Do you think that this will be the, the defining issue of the, of the coming elections?
36:00 Speaker 02 So just this morning of recording, Elizabeth Warren and Bernie Moreno, who is the senator from Ohio, they wrote an op-ed basically saying that we need to save social security, and they kind of said by any means necessary, and specifically that we need to get rid of the tax cap so that social security is collecting more in revenue, and it's only fair that all workers pay the same rate and not rich workers pay a lower rate. There are going to be a lot of bipartisan proposals coming. I think a couple of things could happen, but definitely one of them is if we lose a lot of immigrants again, that number is going to, that 2032 Q4 is going to move up. And I think if it takes another move up, I think people will start to freak out.
36:45 Robin Rauzi? Yeah.
36:46 Speaker 02 We're close enough that this depletion date is much more sensitive to current economic conditions than it was, you know, 15 years ago. So the reason why we think all of this is happening is because I should have probably led with this. If the social security trust fund is depleted, you still have social security. The benefits are cut by a flat amount for all current and future beneficiaries to make the program solvent over the 75-year window. So basically, it has 75 years of projected revenue, 75 years of projected benefits. It's got to make a cut to make those lines cohere.
37:22 Robin Rauzi? They say it was 22%?
37:23 Speaker 02 22%. If they bring in the social security disability insurance trust fund, it would be 2034 at 17%. So that is why they're going to do something, because that would be catastrophic. I mean, not just like people would be mad, I mean, like that would be catastrophic for our economy. There are rural areas where half of their income comes from social security.
37:42 Robin Rauzi? God, really?
37:43 Speaker 02 I mean, there's, rural areas are a lot older than urban areas. The other thing that's kind of crazy is like, it would, it would hit some states a lot harder than others. And you're like, oh, Florida. No, no, no, Maine. It would hit places like Maine really hard. I think Maine is the most rural state. Think of states without a massive, large principal city.
38:07 Robin Rauzi? Okay, well.
38:08 Speaker 02 Those states tend to be whiter, and they tend to be older, and then they're going to have more of their... If you are white and old and don't have a principal city full of young ethnic people, your social security cuts will hit you harder. I guess my pitch to young people would be you have so much more to lose.
38:24 Robin Rauzi? Hmm.
38:25 Speaker 02 Maybe is the right way to say it. You have so much more to lose than someone who is older. So if you take ownership over this program, I think it would be shocking politically to a lot of sitting senators and sitting House representatives. But yes, you have the most to pay in now, but you have far more to lose than you'll pay in.
38:46 Robin Rauzi? We're going to take a break and we'll be back in a second for whatever the other stuff is we do.
38:51 Speaker 02 Okay.
38:52 Robin Rauzi? Okay.
38:53 Speaker 02 Finish it off with edicts, mainly petty, our executive orders. Robin, what is your executive order for the week?
39:06 Robin Rauzi? My executive order is in Rousey Republic, we will have age-appropriate casting. I was thrown over the edge on this by Margot's Got Money Troubles. Okay, Elle Fanning, you're in your late twenties, you're playing nineteen. All right. Your mother is being played by Michelle Pfeiffer. I didn't know how old Michelle Pfeiffer was, but I did look it up because I was like, I'm pretty sure Michelle Pfeiffer was acting in movies when I was still in school, like maybe middle school. And I am definitely personally too old to be the mother of the nineteen-year-old in this show. Yeah. Michelle Pfeiffer is sixty-eight years old. Don't get me wrong, she maybe doesn't look sixty-eight, but just because you're married
39:50 Robin Rauzi? to the producer of the show does not mean you are age-appropriate for the role.
39:54 Speaker 02 Okay. Mine is going to be, I don't mean to throw shade on Michelle Pfeiffer or anybody in particular, but I do think that if you have had cosmetic procedures, you have to disclose them if you sell beauty products.
40:10 Robin Rauzi? Oh.
40:11 Speaker 02 So my executive order would be, like, if you are in anything related to self and beauty care and you have had cosmetic surgery, you need to disclose it.
40:20 Robin Rauzi? Mm-hmm.
40:21 Speaker 02 Because it's like these women are like...
40:24 Speaker 02 On Botox, having had like their lips done and like a nose job and a chin job and there's like cheek jobs and they've had all this surgery and they're selling you makeup.
40:33 Robin Rauzi? And they're like, this face cream will change everything.
40:35 Speaker 02 All you need is this, this face cream and like, that's the secret to happiness. So I'm, I'm like, yeah, if you just, if you have had cosmetic procedures, you, you have, you can't sell, it's like, truth in advertising gets extended to cosmetic procedures related to your face and the products you sell.
40:51 Robin Rauzi? Okay. And spiritual sponsors, what's keeping you going this week?
40:54 Speaker 02 You go first.
40:57 Robin Rauzi? Damn it. Well, I mean, the World Cup definitely keeping us going this week. My wife made me listen to a part of a recent episode of A Touch More, the podcast with Megan Rapinoe, and she was waxing on about how great it is that people are visiting the country and going to places like Buc-Ee's and having this experience with, you know, bottomless chips and salsa and all sorts of things. But she did say, it's kind of, it's a little, she called it like a tough mirror. And she said, I feel like we're like the inflatable bounce house of circus capitalism that's been maxed out in America and everyone's just coming here in a big bounce house that's on a flatbed truck that's going to the biggest
41:38 Robin Rauzi? stadium you've ever seen. Oh, yeah, that's excellent.
41:44 Speaker 02 My spiritual sponsor, well, okay, so in addition to your spiritual sponsor, which is mine too, my spiritual sponsor is that the exact word for the 250th anniversary came up on Jeopardy. And my husband said that I have never looked or sounded more triumphant in my entire life than when I yelled out to Ken, semi-quincendennial.
42:13 Speaker 02 And I didn't get it. And I was like, the optimist led me here.
42:19 Robin Rauzi? To this moment.
42:20 Speaker 02 Because we didn't know the word and then they corrected the word and then we talked about that. And so like my whole, I was like, my whole life led me to here, to just being able to yell at Ken Jennings, semi-quintcentennial.
42:31 Robin Rauzi? What was the category?
42:32 Speaker 02 I think the category was like, big words. The satisfaction of knowing an answer on Jeopardy when none of them do, it doesn't come up that often. This is like, this is like the solar eclipse. Like, this is a big moment. But they don't know and I know. But semi-quintcentennial, that was, that is my spiritual sponsor moment.
42:50 Robin Rauzi? Great.
42:56 Robin Rauzi? All right, time for the credits.
42:57 Speaker 02 The Optimistic Economy Podcast is edited by Sophie Laland. Our video production for social media is by Andy Robinson. We have just hit 50,000 followers on TikTok. Video clips from the show are available to share on TikTok, Instagram, YouTube, or LinkedIn.
43:13 Robin Rauzi? We're also on Facebook.
43:14 Speaker 02 We just got on Facebook.
43:16 Robin Rauzi? I actually have thrown down with Andy that Facebook will reach 60,000 followers before TikTok. Was that my bet, Andy?
43:23 Speaker 02 There was some kind of bar bet made over follower count because we just got on Facebook. And this is a throwback to Gawker, if you guys used to read Gawker. The olds love us. Buy a t-shirt tote bag on our website, optimist economy.com. We are out of hats again. And we're going to be selling some new t-shirts. And I think I'm going to go more is more on the design, but we'll see.
43:48 Robin Rauzi? Consuming loser bucket hat. I see it coming. All right. If you're on Substack as a free or paid subscriber to Optimist Economy, you can join our chat room there. And of course, if you have the means to contribute at whatever level is comfortable for you, we'll take your gift at optimist economy.com.
44:12 Speaker 02 Note from production, let's keep rage baiting. Our rage bait on Facebook is, we need to cut the number of corporate tax coupons that we give out so that we can adequately invest in children. And they're like, the ruin of this country. She is a communist. And then there's people who are like, wow, but her parents are so proud of her. And then it's like, she's running the country into the ground. Those are our Facebook comments. Come join us there.
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