“Social Security is going broke.” So said John Stossel in a piece that he did for Fox News in August of 2018. Other financial gurus and economists have weighed in with similar opinions. But is it really going broke? Is Social Security going bankrupt or merely headed for insolvency? And is there a difference between the two? You can be insolvent without being bankrupt, but you can’t be bankrupt without being insolvent. Insolvency is the inability to pay debts when they are due. Bankruptcy is usually a final alternative when all other attempts to clear debt fails. Right now, Social Security is meeting its payment obligations (it is not unable to pay its “debts” to its beneficiaries) so right now; Social Security is neither insolvent nor bankrupt. But just because it is not out of money now, isn’t it headed for a point in time when it will “go broke?”
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