As U.S. Social Security and Medicare trust funds near depletion in the early 2030s, Congress faces the daunting prospect of significant benefits cuts—24% for Social Security and 11% for Medicare. Rather than make unpopular choices between tax hikes or spending cuts, legislators may resort to borrowing. This approach, however, risks triggering immediate inflation, as seen during the pandemic, when a $5 trillion spending surge without a clear repayment plan devalued the dollar. By 2025, if Congress tends to short-term fixes without real reform, the federal debt could surpass 156% of GDP, straining investor confidence and possibly pushing inflation to alarming levels. This scenario would hurt Americans across all economic classes, eroding savings and increasing living costs. As voters react, failing to foresee the consequences of unchecked debt could result in severe political repercussions. Ultimately, the reliance on borrowing to maintain benefits may lead to a fiscal crisis with no easy remedy.
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