Last updated Nov 29, 2025
Prediction
Friedberg
governmenteconomy
Despite funding shortfalls and asset losses, U.S. pension systems will not be allowed to fully default; the government will intervene to ensure pensioners continue receiving payments, though benefit levels may be reduced somewhat rather than going to zero.
We're not we're not going to allow, given the civil unrest and social unrest risk. And obviously as a democracy, we're not going to allow that all to go to zero and we're not going to let pensioners not get paid. Ultimately, that's just a kiss of death. Maybe pension payments are reduced to some degree.View on YouTube
Explanation

Friedberg’s claim is that when U.S. pension systems face funding shortfalls and asset losses, the government will intervene so that pensioners keep getting paid—perhaps with reduced benefits, but not with payments going to zero.

Since the episode aired on April 7, 2023, U.S. policy and practice have indeed continued to follow a pattern of intervention rather than allowing full pension wipeouts:

  • Under the American Rescue Plan’s Special Financial Assistance (SFA) program, the Pension Benefit Guaranty Corporation (PBGC) is providing an estimated ~$97 billion to more than 250 severely underfunded multiemployer plans so they can pay all benefits due through 2051, including reinstating and making up for some previously reduced benefits. (pbgc.gov)
  • Department of Labor and PBGC guidance in 2023–2025 explicitly urges eligible, distressed plans to apply for SFA so they can continue paying benefits, reinforcing the goal of preventing insolvency from cutting off pension payments. (dol.gov)
  • Existing legal frameworks such as the Kline–Miller Multiemployer Pension Reform Act and the Butch Lewis Act are designed either to reduce benefits in troubled plans or to inject federal aid, rather than permitting total loss of benefits—consistent with his description that payments might be reduced but not go to zero. (en.wikipedia.org)

Over the 2023–2025 period, there are no widely reported cases of major U.S. pension systems fully defaulting with pensioners permanently receiving no payments; distressed plans have generally been supported via PBGC guarantees or special federal assistance, with at most partial benefit reductions. (This is an inference from the above policy and assistance landscape.)

However, Friedberg’s statement is effectively a long‑term structural prediction—that the U.S. will not allow pensions to go to zero in future crises. That kind of "we will never allow X" claim can only be conclusively evaluated over decades. The fact that government behavior up to late 2025 is consistent with his view does not prove it will always hold in future.

Because the prediction is about an ongoing, long‑horizon policy pattern and not a specific event by a specific date, and no contrary event has yet occurred but the future remains open, the status is best classified as inconclusive (too early to tell).