The late Berkshire Hathaway vice chairman once saw Social Security as a pillar of American dignity and argued against policy shifts that would hurt retirees.
What Happened: In a 2011 discussion at the University of Michigan's Ross School of Business, legendary investor Charlie Munger called Social Security "a credit to our civilization" and firmly opposed proposals to reduce benefits or raise the retirement age.
"I personally would not touch Social Security in terms of its present promises," Munger said. "It's worked with low administrative cost and low fraud, and it's given a lot of people their main dignity in old age."
When asked whether gradually increasing the retirement age would be acceptable, Munger pushed back. "I personally wouldn't do it," he stated.
"To take on the political ill will from tinkering for some guy who's only got three years to live anyway and take away $30 a month—I just don't want to do it," Munger said then. “I don’t think it would be a good idea.”
He argued that cutting benefits would be politically and morally counterproductive. "It's a stupid allocation of goodwill and time," he added. "I would save my effort for what really matters."
Instead, Munger proposed funding Social Security with a value-added tax (VAT), a system used widely across Europe. "As long as we're as rich as we are, we should find a way to afford it," he said. "I think a VAT is a very desirable tax… it subsidizes exports, and we need that."
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Why It's Important: More than a decade later, Munger's warnings remain strikingly relevant.
Last week, the Social Security Administration came under fire for allegedly sending an email falsely claiming that President Donald Trump's new tax law eliminates federal income taxes on Social Security benefits for most seniors.
In reality, the law does not remove these taxes but offers temporary deductions instead. Critics, including former SSA officials and Democrats, have called the email misleading and unprecedentedly political.
The legislation, which Trump hails as historic, is expected to increase the federal deficit and cut health coverage for millions, with economists warning that it mainly benefits the wealthy at the expense of lower-income Americans.
Previously, the non-partisan Committee for a Responsible Federal Budget has cautioned that Trump's "One Big Beautiful Bill" could accelerate the exhaustion of the retirement trust fund to as early as 2032 by reducing taxes on benefits.
Estimates suggest that completely scrapping these taxes could cost an additional $1.5 trillion.
Meanwhile, Treasury Secretary Scott Bessent has proposed a broader solution that would link the program to a new sovereign wealth fund funded by "baby bonds" given to newborns.
However, any move to invest in equities would require both congressional approval and new borrowing to repay current bondholders — a costly approach given today's high interest rates, former trustee Charles Blahous told the Wall Street Journal.
Photo Courtesy: Kent Sievers via Shutterstock.com
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