Economist blows whistle on multi-billion dollar plot to rob Social Security

Editor's Note: After this article was published, White House spokeswoman Liz Huston reached out with this comment: "President Trump will always protect and strengthen Social Security. President Trump proudly delivered No Tax on Social Security for nearly every senior in America despite every single Democrat in Congress voting against it.”

When President Donald Trump sought a second term in 2024 by promising to cut government spending, he repeatedly reassured the American public that this would not include reductions in Social Security spending.

Experts with whom I've spoken disagree.

Take Dr. Karl Widerquist, a philosopher who specializes in economic theory and teaches at Georgetown University in Qatar professor. When I asked him in September if Trump would jeopardize Social Security, Widerquist told AlterNet that "from the level of corruption I've seen in the Trump administration, I certainly think they would want to do that." The "do that" on that occasion was "to privatize Social Security into cryptocurrency and other vehicles from which Trump and his cronies can personally profit while the American taxpayers suffer."

Or how about Martin O'Malley, the former Social Security commissioner? Speaking to AlterNet in August, he characterized Trump and supporters like Treasury Secretary Scott Bessent and the world's richest man, Elon Musk, as literally genocidal.

"They believe a person with a disability who can't work is a waste!" O'Malley explained. "That an elderly person is a waste! That an orphan child is a waste!"

He added, "That's why so many of the hardest-right ideologues — like Elon Musk, who says empathy is the greatest weakness in the Western mind — are going after Social Security. Not only is it the one agency with money in the bank they can rob, but it's also an agency that defends a principle most of us still cling to: that in America, there's no such thing as a spare American — no such thing as a human being who is a waste. That's what these ideologues, eugenicists, and monopolists are going after."

To create a broader context for this interview, AlterNet spoke to Teresa Ghilarducci, Professor of Economics and Director of the Wealth Equity Lab at The New School.

This interview has been lightly edited for clarity and context.

ROZSA: What specifically do you see the administration cutting into Social Security's ability to function? Is it staffing, policy, or something else?

GHILARDUCCI: Two things. First, the Trump administration has accelerated a decline in staffing that began under the Obama administration. Having a friendly, accessible Social Security office in your community — where you can talk through major life transitions like moving from work into retirement or disability — has been vital to the public's confidence in the program. The Trump administration has closed regional offices across the country, leaving people in vulnerable situations unable to get the answers they need in the form they need them.Second, decades of research show that political elites have significant influence over how young people and workers think about Social Security. When elites claim the only way to make the system solvent is to cut benefits, or that people need to work longer, it breeds fear and resignation — a sense that decline is inevitable, when it absolutely doesn't have to be. The system is only as strong as the public's will to sustain it. The Trump administration has undermined that will in two ways: by neglecting staffing and by cutting independent research into improving the system (I was part of a research team cut during the DOGE initiative), and by talking about Social Security in a "gloom and doom" way.

ROZSA: Who bears the brunt first when retirement security erodes — near-retirees, current retirees, or younger workers who assume it won't be there?

GHILARDUCCI: I used to think near-retirees bore the brunt, and they do suffer in many ways — panicking about needing to work longer without having full agency over that choice, facing age discrimination, confronting physical and mental limitations in increasingly demanding jobs, and finding that their skills and experience are no longer valued in a changing labor market.But I now think younger people are actually worse off. As the administration cuts Medicare, Medicaid, and Social Security, younger generations face growing responsibility for their own retirement with no help from employers or government — while simultaneously being asked to support older relatives who now need their assistance. They're squeezed from both directions. Retirees tend to be somewhat shielded from immediate, unpopular cuts, so they may be last in line for material harm — but the anxiety these threats produce may cause them the most psychological suffering.

ROZSA: Is there a meaningful difference between reforming Social Security and quietly hollowing it out? How would a listener tell the two apart?

GHILARDUCCI: Whenever you hear "reforming" or "modernizing" Social Security, listen closely for whether the next sentence calls for more revenue into the system. If that call doesn't come, "reform" almost certainly means cutting benefits. The only reliable way to distinguish genuine reform — which strengthens the system — from reform that guts it is whether there's an explicit call to put more money into Social Security. That's the only kind of reform that will actually make the system work for American workers, employers, and the broader economy.Q: What data or research from your career best illustrates what's actually at stake for average workers right now?A: My research shows that people in their late 50s have a very low chance of remaining employed up to age 65, and hardly any realistic chance of working until 70. That reality makes calls to raise the Social Security retirement age to 70, or for older workers to simply "work longer," hollow and cruel.I also keep returning to how badly the current retirement system has failed workers. For 40 years, 401(k)s and IRAs were supposed to help baby boomers supplement Social Security and replace traditional defined-benefit pensions. After four decades, that experiment has failed the bottom 95% of workers — most don't even have one of these accounts, and those who do typically have only around $100,000–$200,000, nowhere near enough to sustain a longer retirement. The only real beneficiaries have been the highest-income workers.Q: It sounds like the working class in general is losing ground — that this isn't just about Social Security, but about the working class more broadly. What are your thoughts on that?

GHILARDUCCI: That's right. The decline in unions over the past 40 years has driven up profits while wages have stagnated in real terms — workers' pay hasn't kept pace even with their own productivity gains. Declining worker bargaining power has also meant declining minimum wages and weaker protections, so workers haven't been compensated fairly for what they contribute to the economy.That erosion extends to the institutions that once provided economic security: pensions, long-term job stability, and affordable healthcare (even people with insurance now face much higher copays). The main thing the financial system has offered workers instead is debt — credit card debt, education debt, medical debt. As a result, the working class — roughly the bottom 90% of earners — is entering retirement with far more debt than previous generations, including mortgages, credit card balances, and even their own lingering student loans, not their children's.

ROZSA: If nothing changes course, what does the next five to ten years look like for someone counting on Social Security as their primary retirement income?

GHILARDUCCI: If nothing is done — by citizens, voters, Congress, or the president — Social Security benefits will be cut by 25% within just four years, once the trust fund reaches its 2033 deadline. About 35% of retirees rely on Social Security for essentially all their income, and the vast majority depend on it as their major source of guaranteed income. A 25% cut means significantly less income and a much higher risk of falling into poverty — pushing middle-class retirees toward downward mobility and leaving already-poor seniors worse off still.That, in turn, risks real political instability and places a massive burden on adult children who would need to support newly poor parents. The frustrating part is that fixing this isn't an economically difficult problem — putting more revenue into Social Security doesn't hold back the economy; in fact, higher benefits boost local economies where retirees live. So far, Congress and the President haven't acted. The hope is that voters — through midterm elections and the next presidential race — will demand it. It's a political will problem, not a technical economic one.