Social Security and Medicare trust funds are projected to run dry by 2034, raising fears of steep benefit cuts and a potential bond market selloff, according to Oxford Economics lead U.S. economist Bernard Yaros. He warned that without reforms, Social Security could face an immediate 19% cut to benefits, with fiscal transfers shrinking to 11% of GDP by mid-century. Yaros said Trump’s policies, including tariffs and Medicaid cuts, point toward tightening, though a federal appeals court recently struck down most of his reciprocal tariffs. Concerns over insolvency are mounting, with the Cato Institute projecting Social Security could run out by 2030. This would force younger workers to shoulder higher taxes or reduced benefits, potentially losing the equivalent of $110,000 in lifetime earnings.
