Business
The national debt’s 20-year deadline and baby boomers’ spending problem

In a new analysis and in an interview with Fortune, the Penn Wharton Budget Model (PWBM) faculty director sketches an outer limit for U.S. federal debt and a political economy that heavily favors older Americans. His bluntest line may also be his simplest: “We do spend about 10x more per older person than we do per younger person. In total, we spend about 6x in aggregate on older people than younger people.”
This means means the average older person gets much more than the average younger person as a policy choice, but since there is a greater number of younger people, when you add up all dollars going to each group, the total to older people is “only” about six times. PWBM estimated in April retirees (adults age 65 and older) receive $2.7 trillion, equal to 38.6% of total federal outlays and 61.9% of age-assignable spending, while working-age adults (ages 26-64) receive $1.2 trillion (27.9% of age-assignable), and children and young adults (under age 26) receive $449 billion (10.3%).
Smetters added he works a lot on understanding the political economy of the U.S. and there’s just “a lot of incentive for every generation to try to pass a big bill to the next generation. The question is, how long can they get away with that?”
A 210% ceiling—and a 20‑year runway
Smetters and his team estimate U.S. federal debt cannot rationally exceed about 210% of GDP. Above that level, he argues, there is no feasible broad‑based tax on labor income that can cover the interest bill at the returns investors will demand. That figure is an “outer bound,” not a forecast: In his words, it is “really the upper limit,” not a target that markets will calmly finance.
The more immediate concern is timing. Under what PWBM labels “historical” excess health care cost growth—the pace at which health spending per person has tended to outrun the broader economy—the U.S. is likely to hit that outer bound within about 20 years, with a one‑in‑four chance of hitting it in just 14. In the model’s median scenario, the “closure year”—the last point at which policymakers can still restore sustainability with a feasible tax—is as early as 2045 if health care costs grow quickly, and 2051 under more optimistic assumptions.
“The assumption is that the financial markets are being set in a way where they keep believing that Congress will eventually get its act together up until the point where it’s mathematically impossible for that to be true anymore,” Smetters said. “Sometimes people ask me, ‘You know, when could financial markets unravel?’ And the answer is, well, that could happen today, it could happen tomorrow, it could happen whenever they stop believing that Congress will eventually get its act together.”
When baby boomers meet the debt ceiling
Those dates line up uncomfortably well with the gradual fading of the baby boomer generation from positions of economic and political power. Asked whether it is a coincidence his 20‑year horizon roughly overlaps with the last years of baby boomer dominance in Congress and the C‑suite, Smetters was cautious but open to the framing.
He connected the budget choices to a broader psychology of ownership. In the Social Security and retirement space, he says, Americans routinely treat government‑funded benefits as if they were purely private property—even when taxpayers have put up most of the cash.
“We always stretch out what ownership is,” he told Fortune. “We like to think: ‘Yeah, If the government put in 90% and I put in 10%, I still want access to the entire account because I need to replace my roof and I have a good reason [for needing the funds].”
That mindset shapes the debate over Social Security, he added, where the main trust fund that pays retired workers’ benefits is projected to run dry in the early 2030s. Smetters noted his team was earlier than official forecasters in calling the “crossover date” when benefits would exceed revenues, and their depletion date—around 2032 for the main old‑age fund—has since been confirmed by the Social Security Trustees and the Congressional Budget Office.
Once the trust fund is exhausted, he estimated, the program can pay only about 83% of scheduled benefits, and that fraction erodes further over time. But he doubts that deadline will force timely action.
“The last time we fixed Social Security in 1983, we waited very close for bad things to happen,” he said. “Based on past experience, we’ve waited pretty long … to take action.”
Why easy fixes fall short
In the current political debate, that looming Social Security shortfall has collided with a parade of more exotic ideas, from Trump Accounts for newborns to proposals for some kind of “AI dividend” that would redirect tech profits back to the public.
Smetters was skeptical.
“People are excited about AI and think it’s going to lead to all this economic growth. People are just misunderstanding it,” he said. “Even if it does lead to more growth than we’re projecting, spending is going to go up with it. It’s not true that AI will simply increase the tax base without increasing spending.” His biggest concern, he added, is how many of us are “really misguided in our understanding of future progress, future growth.”
Behind the scenes, Smetters has pushed a less flashy but more radical idea: Shut down the costly tax deduction for 401(k) and 403(b) contributions, which he estimates cost roughly $1.3 trillion to $1.4 trillion in forgone revenue over 10 years in earlier work, and reroute that money into non‑contributory retirement accounts for low‑income workers linked to the earned income tax credit. Crucially, he said, people would not be allowed to deposit their own money in those accounts at all, precisely to avoid the political pressure for early withdrawals that has undermined past efforts to nudge workers into saving more.
The psychology that Smetters describes isn’t new; the great comedian George Carlin captured it decades ago with the line Jon Stewart calls one of his most profound: “My shit is stuff; your stuff is shit.” It also recalls the paradoxical protest sign from a Republican voter about a federal benefit: “Keep your government hands off my Medicare!”
Smetters’ version is if the government funds 90% of your retirement account and you put in 10%, you still feel entitled to “the entire account” because, as he put it, “that’s all mine. It’s not yours.”
A Liz Truss warning for Washington
If the numbers and the politics sound abstract, Smetters insisted the consequences are not. When countries bump up against their fiscal limits, he said, the damage goes far beyond the bond market.
“You get this radical reordering when a country is overwhelmed with debt,” he said, pointing to episodes ranging from Germany’s collapse in the early 1930s to modern crises in Argentina. Fiscal crack‑ups, he argues, make voters more willing to gamble on strongmen or untested extremes on the left or right.
He said he keeps returning to Britain’s short‑lived Liz Truss government as a cautionary tale, referring to the prime minister whose unserious financial plan saw her ejected from office in less time than it took a head of lettuce to wilt, as the British press savagely noted.
“I think we’re actually going to see financial markets try to discipline us long before we hit that limit,” he said of the U.S. debt path. “We could easily have our Liz Truss moment in the United States within the next five, 10 years.”
The technical PWBM paper that underpins his concerns emphasizes the same point in more formal language, using a classic framework from economists Harold Cole and Timothy Kehoe: Even well before a country reaches its mathematical solvency limit, there is a “crisis zone” at intermediate debt levels where a shift in investor expectations alone can trigger a self‑fulfilling run. In that zone, markets don’t wait for the last dollar of capacity to be used up before demanding higher interest rates—or refusing to refinance government debt at all.
“What people don’t get is that when you have these financial collapses, it’s not just finance,” Smetters said. The problem the U.K. faces now, he said, is that they already have very high taxes so their “fiscal space” is quite limited in terms of what they can do now.
“That’s the problem with the baby boomer generation,” he added. “It’s going to be really hard to change benefits over time.” Sometimes when you have giant fiscal problems that keep going unsolved, year after year, “they can lead to really incredible changes in society that can be very disruptive, beyond just economics.”
Business
establish importance of Apple’s design team when he takes over as CEO: report
Bloomberg’s Mark Gurman today posted the latest edition of his Power On newsletter, recapping the last ten years of Apple’s corporate structure in which the influence of the design team waned at the executive levels in the Cook era, fuelled by Jony Ive’s exit and talent departures as finance and operations had an increasingly larger say over product direction.
However, Gurman believes that incoming CEO John Ternus may be about to reset that relationship, and reaffirm the importance of the design group for the company’s future.
After Ive left the company, oversight of the design team fell to ex-COO Jeff Williams. This was already a major shakeup from the prior regime where Ive’s industrial design group dictated the product roadmap of the company from the top-down.
This arrangement was highlighted all the way back in 2011, in Steve Jobs’ biography by Walter Isaacson. Jobs is quoted as saying that Ive has more operational power than anyone at Apple apart from himself, because ‘the way I set it up’.
Fast forward to present day and that cannot be farther from the current situation, in which many believe the company has demoted design to be less important than its operations division. Apple doesn’t even have a senior design role right now, and only recently added Molly Anderson and Steve Lemay’s profiles to the leadership page.
Incoming CEO John Ternus, who is presumably going to be more involved in product in general than Cook was, is apparently looking to restore some of the design’s team’s authority. Gurman says that Ternus has already spent a considerable amount of his time with the industrial design group, as he prepares for his succession to begin on September 1.
Ternus is quoted by Gurman as having said that the ‘the most beautifully designed thing that most customers own is an Apple product. We’re going to make sure that stays the case’.
Business
F.A.A. Investigates Near Miss Between Planes at Boston’s Logan Airport
The Federal Aviation Administration said that it was investigating a near miss between two planes at Boston Logan International Airport that happened on Saturday morning.
The episode happened at about 11:30 a.m., when Delta Air Lines Flight 2351 performed a go-around to avoid another plane that was taking off from an intersecting runway, the F.A.A. said in statement. The agency did not identify the other plane involved.
A go-around is a standard maneuver in which a plane aborts a landing, repositions and tries again. The F.A.A. said information around the episode was preliminary.
Data from Flightradar24, a flight-tracking website, showed that the Delta flight, arriving from Dallas, aborted its approach for landing as American Airlines Flight 3161, bound for Charlotte, N.C., approached from an intersecting runway.
The two planes were a few hundred feet apart, the tracking data showed. The Delta plane landed around 10 minutes later, according to the tracking data.
Delta said the flight crew received an advisory from an onboard system warning of potential traffic while the plane was descending and coordinated with air traffic control to perform the go-around. The plane landed safely and the passengers deplaned normally, according to a spokesperson for the airline.
The plane, an Airbus A319, was carrying 129 passengers and six crew members, the spokesperson said.
American Airlines did not immediately respond to a request for comment.
This was the latest in a string of near misses at U.S. airports in recent months. In April, an American Airlines regional jet flew dangerously close to an Air Canada regional jet after aborting its landing at Kennedy International Airport, according to the F.A.A.
The same month, the agency also investigated a close call between two Southwest Airlines jets at Nashville International Airport, in which an air traffic controller inadvertently directed an incoming plane into the path of a departing aircraft. The planes came within about 500 vertical feet of each other as the pilots reacted to onboard collision alerts, according to Flightradar24 and the F.A.A.
Business
Gazebo collapse at Hard Rock injures 5
HOLLYWOOD, Fla. — A gazebo collapse at the Seminole Hard Rock Hotel & Casino Hollywood injured five people on Saturday evening, officials said.
Leer en español
It happened at around 7 p.m. near the pool at the DAER Dayclub.
Bystanders quickly responded and medics transported the injured to Memorial Regional Hospital with non-life-threatening injuries.
The collapse was believed to have been weather-related; strong winds and rain were moving through the area at the time.
All five victims are expected to recover.
A spokesperson for the Seminole Police Department said in part that the “safety and security of our guests and team members are our highest priorities” and that the club “was closed immediately to ensure the safety and security of all attendees.”
Editor’s note: The original version of the article misstated the time of the collapse as 7 a.m. instead of 7 p.m. It has been corrected.
Copyright 2026 by WPLG Local10.com – All rights reserved.
Business
SOS: Could Doug Parker Really Return To “Save” American Airlines?
There’s a rumor swirling around that American Airlines may bring back former CEO Doug Parker to replace current CEO Robert Isom. When I first heard this, I thought “wait, there’s no way the board would do something like this, right?” However, the more I think about it, the more I think “wait, that’s exactly what American’s board would do, of course.” Let me explain…
Airline executives speculate Doug Parker may replace Robert Isom
In recent years, American has been falling further and further behind both Delta and United when it comes to financial performance. In reality, Delta is still strongest, while United has been pulling ahead at American’s expense, as it seems to be a zero sum game between the two airlines.
Simply put, the company has lacked a cohesive vision for so long. Premium… not premium… now premium again… who is to say?! It has now gotten to the point where management realizes they need to invest in customer experience, but one wonders if it’s too little too late, especially with the pace at which Delta and United are also investing in their products. It’s not easy to make up ground in these circumstances.
I’m not alone in wondering who will fix American, and when they’ll replace CEO Robert Isom. If American had a competent board, we would’ve seen a management change a long time ago. While I’m sure the board doesn’t want to admit that it has been asleep at the wheel, sooner or later, something’s gotta give.
The issue is that several board members are doubling down and don’t want to admit defeat, since they’re the same people who were behind the decision to choose Isom over Scott Kirby to lead American next (Kirby was president of American, and was then told he’d never be CEO, which is why he left to go to United, and there’s a lot of bad blood there).
So that brings us to the latest rumor that’s swirling around. Brian Sumers, who writes the Airline Observer (a paid subscription for full access) recently attended the IATA AGM in Rio de Janeiro, which is the one event each year attended by virtually every airline industry executive. While a lot of important stuff happens in official meetings, what’s equally interesting is what’s discussed off the record, and at the bars late at night. Airline executives love to gossip (who doesn’t?!).
Sumers explains that one of the most common topics of conversation among executives was whether Isom will make it through the end of 2026, and who will eventually replace him. I’ve shared my take in the past on who I think would be a good fit to replace Isom, but it seems industry executives have a different theory. The leading candidate to replace Isom, according to other executives? Well, it could be former American CEO Doug Parker (who was previously CEO of US Airways, and CEO of America West before that — he’s one of the industry’s longest serving airline CEOs).
The idea is that Parker has the industry experience and respect needed to turn the airline around… or something. Keep in mind Parker is still somewhat in the industry, as he’s on the board of Qantas. And he’s “only” 64, five years younger than Delta CEO Ed Bastian.
Parker would do nothing to fix American’s underlying problems
As a person, I respect Parker quite a bit. He seems like a kind, fair guy, he’s surprisingly pro union, and he has certainly done a lot for the airline industry over the years, being a leading voice during tough times (including going to Washington asking for bailouts).
However, if you ask me, Parker and Isom are almost identical in that regard — they’re both nice guys, but they lack a vision. Even as American started its slow descent under Parker, he had the same “oh, everything is fine” narrative that Isom now has. I actually suspect this might’ve been one of the reasons that Kirby was passed over in favor of Isom — Kirby is absolutely cutthroat, highly competitive, and wants to win, while neither Parker nor Isom have that mentality.
Replacing Isom with Parker would do absolutely nothing to fix American. The single biggest thing that American needs is a CEO who can excite employees, and who can get them to rally behind a vision. Period. End of story. Without that, there is no turnaround, because employees are just confused and indifferent, given the lack of direction they’ve been given.
Personally, I also think it needs to be an outsider, so that the board shows employees that they’re serious about change. Simply rearranging the America West deck chairs doesn’t send a message of actual change to employees. I’ve said it before, and I’ll say it again — someone like Air France-KLM CEO Ben Smith would be the person to turn the airline around.
Now, do I think the odds of that happening are actually good? No, probably not. That would be way too out-of-the-box for American’s board. And American is an airline that probably more than any other promotes from within. That’s great in theory, but it’s also why there’s such groupthink, and how we’ve gotten to this point.
American actually has some decent executives now — recently appointed Chief Commercial Officer Nat Pieper is a bright guy, and I think he has the right idea with strategy, and he’s also sort of an outsider. That being said, my impression is that he might be more of a Glen Hauenstein type than a Bastian type (Hauenstein was Delta’s former president, and he was really the guy behind most of the strategy, even though you almost never heard from him).
Meanwhile Chief Customer Officer Heather Garboden has been the person behind many of the positive changes in recent times, but again, she’s from the America West “club,” and I’m not sure a 20+ year veteran of the company is really the person employees are going to rally around, because they’ve been let down too often. For that matter, I don’t know enough about her to wager a guess as to whether she can actually be innovative — virtually all the positive changes we’ve seen from American in recent times have just been obvious areas where the company is catching up with the competition.
One thing is for sure — the board can only ignore reality for so much longer. Or I dunno, maybe they can, because little about our corporate world makes sense.
Bottom line
American CEO Robert Isom just hasn’t been doing a great job leading the airline in the right direction, at least when you look at the company’s financial performance compared to that of competitors. While the idea seems sort of wild to me, many other industry executives reportedly think that the most likely successor to Isom is a return of Parker.
Replacing a nice guy who lacks strategy with a nice guy who lacks strategy just doesn’t strike me as a wise decision. Then again, American’s board is the whole reason we’re in this situation to begin with, given that they opted for Isom over former president Kirby to take over at American.
I’d like to think that there’s no way this could happen, but who really knows…
Business
Americans Have Turned Against AI in Incredible Numbers
Sign up to see the future, today
Can’t-miss innovations from the bleeding edge of science and tech
Email address Thank you!
Not that anyone in power is going to care, but there’s even more evidence that Americans are coming to overwhelmingly loathe AI — despite, or perhaps because, they’re using chatbots more than ever.
In a sweeping new poll conducted by Pew Research, only 16 percent of respondents said they believed AI will have a positive impact on society — a number as dismal as the perception of the tech.
Meanwhile, 49 percent of adults say they use AI chatbots like ChatGPT, which remains the most popular by a considerable margin, with a quarter saying they use the tools daily. That proportion is considerably higher than the 33 percent of American adults who said they used AI chatbots in 2024.
In other words, the tech’s widespread adoption isn’t helping its perception. A full 40 percent of respondents said they anticipate AI will have a negative impact on society, and 31 percent said it will impact them personally in a negative way, too.
This varies quite a bit by age. Gen Z adults, ages 18 to 29, were the most wary of AI, with 48 percent believing it’ll be negative for society. Yet they’re also the group that reported using AI the most, at 66 percent.
Interestingly, the 30-49 year olds and the 50-and-up brackets are more closely aligned, at 39 percent and 37 percent respectively viewing it as negative. They‘re using AI less, though the dropoff between their usage is significant: 61 percent of 30-49 year olds said they used AI chatbots, while only 42 percent of 50-64 year olds did. It was less than a quarter for 65 years and older.
What’s driving this gap between perception and usage is unclear. You could argue that some feel compelled to use it, even when recognizing the tech’s shortcomings and the ethical dubiousness of the industry that’s building it. In fact, many are literally forced to use it at work, with bosses often more enthusiastic about the tech than workers are.
In any case, it’s a real problem for AI’s long-term staying power. Right now the industry is being propelled by hype and the mountains of cash that’re being pumped into it, while profits remain elusive. If no one likes AI years or decades from now, will there be enough customers to keep the industry running?
-
Business1 week ago
How much of Musk’s wealth comes from government help? Virtually all of it
-
Politics1 week ago
What to know about the stabbing that set off fiery riots in Northern Ireland
-
Video1 week ago
Download fans say what they love about the festival. #DownloadFestival #BBCNews
-
Video1 week ago
Why SpaceX IPO isn't about space. #SpaceX #ElonMusk #BBCNews
-
HealthNews1 week ago
The people of Okinawa, Japan only eat until they are about 80 percent full, then stop — and the practice has been linked in multiple peer-reviewed studies to lower rates of cardiovascular disease, slo
-
Food1 week ago
Pope Leo’s plane was grounded. Then the King of Spain stepped in to help
-
TravelNews1 week ago
My Paternal Instinct Should’ve Warned Me About Netflix’s Maternal Instinct
-
Video1 week ago
Claire Danes has the cutest stories about young Kirsten Dunst on 'Little Women' set