PDA

View Full Version : U.S. Issues Raising the retirement age of social security.


Direckshun
11-22-2012, 09:05 AM
A really enlightening piece outlining some solid rebuttals to one of the more popular ideas for reforming social security.

It is often remarked in the media and by the wealthy that the retirement age should be raised. But that's because those who are making the arguments likely love their jobs, are living substantially longer than they were in the 1980s, and make enough bank so that they don't need to rely on social security when they retire.

None of that is true for the lower economic half of society. The lower economic half largely don't work jobs they want to work at forever, they aren't living that much longer than they were in 1980s, and of course will rely on social security when they retire.

The 1980s are worth noting because they were the latest overhaul of social security. People often argue that social security wasn't designed in the 1930s to deal with the 21st century. No... but it was redesigned in the 1980s. Since then, the rich have gotten richer while everybody else has essentially stayed the same.

Another relatively popular solution for social security solution, one that would make the program solvent for the rest of our and our children's lifetimes, would be to simply apply social security taxation to those making over $110,000.

But, of course, the 1% doesn't like that. So they prefer the methodology that hurts the bottom 50% instead.

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/21/why-rich-guys-want-to-raise-the-retirement-age/

Why rich guys want to raise the retirement age
Posted by Ezra Klein
on November 21, 2012 at 2:14 pm

If youíre the CEO of Goldman Sachs Ė if you have a job that you love, a job that makes you so much money you can literally build a Scrooge McDuck room where you can swim through a pile of gold coins wearing only a topcoat Ė then you should perhaps think twice before saying this (http://www.cbsnews.com/8301-18563_162-57552173/goldman-sachs-ceo-entitlements-must-be-contained/):

You can look at the history of these things, and Social Security wasnít devised to be a system that supported you for a 30-year retirement after a 25-year career. Ö So there will be things that, you know, the retirement age has to be changed. Maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained.

Thatís Lloyd Blankfein, CEO of Goldman Sachs, talking to CBS. And heís not saying anything that people, particularly wealthier people with desk jobs, donít say all the time in Washington and New York. So I donít want to just pick on him. But the cavalier endorsement of raising the retirement age by people who really love their jobs, who make so much money they barely pay Social Security taxes, and who are, actuarially speaking, are ensured a long and healthy life, drives me nuts.

If you want talk about cutting Social Security, talk about cutting it. Itís a reasonable point of view. Youíre allowed to hold it.

But ďcuttingĒ Social Security is unpopular and people donít like to talk about it. So folks who want to cut the program have instead settled on an elliptical argument about life expectancy. Social Security, they say, was designed at a time when Americans didnít live quite so long. And so raising the retirement age isnít a ďcut.Ē Itís a restoration of the programís original purpose. It doesnít hurt anything or anyone.

The first point worth making here is that the countryís economy has grown 15-fold since Social Security was passed into law. One of the things the richest society the world has ever known can buy is a decent retirement for people who donít have jobs they love and who donít want to work forever.

The second point worth making is that Social Security was overhauled in the í80s. So the promises the program is carrying out today were made then. And, since the í80s, the idea that weíve all gained so many years of life simply isnít true.

Some of us have gained in life expectancy, of course. As you can see on this graph, since 1977, the life expectancy of male workers retiring at age 65 has risen six years in the top half of the income distribution. But if youíre in the bottom half of the income distribution? Then youíve only gained 1.3 years.

http://www.washingtonpost.com/blogs/wonkblog/files/2012/11/expectancy-at-65.jpg

If youíre wealthy, you do have many more years to enjoy Social Security. But if youíre not, you donít. And so making it so people who arenít wealthy have to wait longer to use Social Security is a particularly cruel and regressive way to cut the program.

Itís also a cut thatís particularly tough on people who spend their lives in jobs they donít enjoy.

You know what age most people actually begin taking Social Security? Sixty-five is what most people think. Thatís the lawís standard retirement age. But thatís wrong. Most people begin taking Social Security benefits at 62, which is as early as the law allows you to take them.

When they do that, it means they get smaller benefits over their lifetime. We penalize for taking it early. But they do it anyway. They do it because they donít want to spend their whole lives at that job. Unlike many folks in finance or in the U.S. Senate or writing for the nationís op-ed pages, they donít want to work till they drop.

As Peter Diamond, the Nobel laureate economist and Social Security expert, told Dylan Matthews:

What do we know about the people who retire at 62? On average, shorter life expectancy and lower earnings than people retiring at later ages. If anyone stood up and said, ďInstead of doing uniform across the board cuts, letís make them a little worse for people who have shorter life expectancies and lower earnings,Ē theyíd be laughed at. Anything that reduces benefits is going to hurt everybody. Itís going to hit people with short life expectancies, itís going to hit people with high life expectancies. But we should not make it worse for those retiring earliest.

Thatís whatís galling about this easy argument. The people who make it, the pundits and the senators and the CEOs, theyíll never feel it. They donít want to retire at age 65, and they donít have short life expectancies, and theyíre not mainly relying on Social Security for their retirement income. Theyíre bravely advocating a cut theyíll never feel.

But you know what they would feel? Social Security taxes donít apply to income over $110,000. In 2011, Lloyd Blankfeinís total compensation was $16.1 million. That means he paid Social Security taxes on less than 1 percent of his compensation.

If we lifted that cap, if we made all income subject to payroll taxes, the Congressional Budget Office estimates (http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/115xx/doc11580/07-01-ssoptions_forweb.pdf) that it would do three times as much to solve Social Securityís shortfall as raising the retirement age to 70. In fact, it would, in one fell swoop, close Social Securityís solvency gap for the next 75 years. That may or may not be the right way to close Social Securityís shortfall, but somehow, it rarely gets mentioned by the folks who think theyíre being courageous when they talk about raising a retirement age theyíll never notice.

Again, I donít mean to pick on Blankfein here. Heís not saying anything unusual, and heís one of the CEOs whoís pretty straightforward about the fact that his taxes are going to need to go up. But he and all these folks who like to talk about raising the Social Security retirement age as if itís a no-brainer need to think harder about why theyíve settled on the cut to Social Security that will concentrate its pain on people who havenít fully shared in the remarkable increase in life expectancy, who donít make much money and who donít love going to their jobs every day.

Direckshun
11-22-2012, 09:08 AM
It should be noted that social security is not a driver of the deficit (Medicare is), and is on pace to remain in the black for at least another twenty years before it even comes close to becoming insolvent.

Brainiac
11-22-2012, 09:18 AM
Believe it or not, I agree with you on this issue. There's no reason to cap the payroll tax at $110,000 of income. It's an incredibly regressive tax.

cdcox
11-22-2012, 09:25 AM
Yeah, social security could be fixed in an afternoon if both houses of congress would be sensible. I'd favor keeping the payroll tax income over $110K. Raising the age at which benefits kick in is just going to keep old codgers in the work place longer occupying opportunities for younger workers. Of course if older folks want to keep working and have the skills employers are willing to pay for, they have the freedom to keep working.

Medicare is a much tougher nut to crack.

Direckshun
11-22-2012, 09:30 AM
Believe it or not, I agree with you on this issue. There's no reason to cap the payroll tax at $110,000 of income. It's an incredibly regressive tax.

We're totally going to run for office together.

I'm already saving money for our bicycle built for two.

go bowe
11-22-2012, 10:29 AM
We're totally going to run for office together.

I'm already saving money for our bicycle built for two.

LMAO

Carlota69
11-22-2012, 10:37 AM
You know what Pisses me off? These assholes in congress and the senate as well as former Presidents make an average of 200k a year plus kick ass medical benefits after they retire, on our backs. Before we go after the average working mans soc sec and Medicare, why don't we Stop paying these fuckers so much money when they a done working??? I love how they talk about how soc sec and Medicare is hurting us, yet they arent willing to cut their retirement? I say we start there, and then see where we a when it comes to "entitlements" (which we have paid into) for the rest of us.

Brainiac
11-22-2012, 11:10 AM
We're totally going to run for office together.

I'm already saving money for our bicycle built for two.

I could never run for office with someone who always votes a straight ticket. It doesn't matter whether or it's a Democrat or a Republican. That mindset is just foreign to me.

Sorry to disappoint. You might try Cosmo or BRC.

Donger
11-22-2012, 12:33 PM
Believe it or not, I agree with you on this issue. There's no reason to cap the payroll tax at $110,000 of income. It's an incredibly regressive tax.

I agree.

ROYC75
11-23-2012, 12:47 PM
You know what Pisses me off? These assholes in congress and the senate as well as former Presidents make an average of 200k a year plus kick ass medical benefits after they retire, on our backs. Before we go after the average working mans soc sec and Medicare, why don't we Stop paying these ****ers so much money when they a done working??? I love how they talk about how soc sec and Medicare is hurting us, yet they arent willing to cut their retirement? I say we start there, and then see where we a when it comes to "entitlements" (which we have paid into) for the rest of us.

:clap: :clap: :clap: :clap: :clap:

patteeu
11-23-2012, 02:12 PM
Believe it or not, I agree with you on this issue. There's no reason to cap the payroll tax at $110,000 of income. It's an incredibly regressive tax.

There's a huge reason to cap it. SS is supposed to be a self-funding, forced pension program with limited wealth transfer characteristics, not welfare. It's not regressive, it's actually progressive as is. Because you shouldn't look at it as if it's a tax that leads to across the board benefits, it's a tax on the working class that leads to a working class specific benefit. High income earners pay a pittance into the program relative to their income, but they receive a pittance out of it too because the program isn't intended for them.

If we're going to go this route, why have SS at all? Why not just expand our welfare programs, raise income taxes and eliminate payroll taxes?

patteeu
11-23-2012, 02:15 PM
You know what Pisses me off? These assholes in congress and the senate as well as former Presidents make an average of 200k a year plus kick ass medical benefits after they retire, on our backs. Before we go after the average working mans soc sec and Medicare, why don't we Stop paying these ****ers so much money when they a done working??? I love how they talk about how soc sec and Medicare is hurting us, yet they arent willing to cut their retirement? I say we start there, and then see where we a when it comes to "entitlements" (which we have paid into) for the rest of us.

That's fine and I wouldn't have any problem with doing that, except that after we're done we'll find that we're in exactly the same place (within the rounding error) because it would have such a trivial impact on our fiscal condition.

BigRedChief
11-23-2012, 02:26 PM
Social Security is in fine shape. No crisis for now. Medicare is the entitlement thats got to be reined in.

Trivers
11-23-2012, 02:29 PM
There's a huge reason to cap it. SS is supposed to be a self-funding, forced pension program with limited wealth transfer characteristics, not welfare. It's not regressive, it's actually progressive as is. Because you shouldn't look at it as if it's a tax that leads to across the board benefits, it's a tax on the working class that leads to a working class specific benefit. High income earners pay a pittance into the program relative to their income, but they receive a pittance out of it too because the program isn't intended for them.

If we're going to go this route, why have SS at all? Why not just expand our welfare programs, raise income taxes and eliminate payroll taxes?

Wait, you are bringing logic into the discussion. That is not allowed by those that think increasing taxes on everything solves all problems.

patteeu
11-23-2012, 02:30 PM
Social Security is in fine shape. No crisis. Medicare is the entitlement thats got to be reined in.

Medicare is by far the bigger problem, but SS still needs to be fixed. Increasing the retirement age (over a period of years) and increasing the cap number to account for wage inflation is a better solution than the class warfare solution advocated by this article because it better retains the original character of the program.

BigRedChief
11-23-2012, 02:42 PM
Medicare is by far the bigger problem, but SS still needs to be fixed. Increasing the retirement age (over a period of years) and increasing the cap number to account for wage inflation is a better solution than the class warfare solution advocated by this article because it better retains the original character of the program.I agree that there is issues looming on the horizon but thats the horizon in 2030 or so?

And there is no way I'm in favor of raising the retirement age until all the other steps have been taken first. Jumping right to raising the retirement age benefits the rich more than any other group. It is the bait and switch.

Medicare is the issue, no SS.

patteeu
11-23-2012, 02:51 PM
I agree that there is issues looming on the horizon but thats the horizon in 2030 or so?

And there is no way I'm in favor of raising the retirement age until all the other steps have been taken first. Jumping right to raising the retirement age benefits the rich more than any other group. It is the bait and switch.

Medicare is the issue, no SS.

Why do you want to wait until there's a crisis before doing anything. The fix now is relatively simple, why wait until it becomes painful (like Medicare is going to be)? I'm certainly not advocating for putting Medicare on the back burner or anything like that. I'm just saying let's start getting serious about all of these issues. Of course, that was made more difficult by the decidedly non-serious campaign that the President just ran on, but there's no way to unring that bell.

The rich aren't the beneficiaries of SS. They could do just fine without it. Raising the retirement age doesn't benefit them, it's just a more responsible alternative to the "hey, let's just hand the bill to the rich for this" approach advocated by this OP article.

mikey23545
11-23-2012, 03:40 PM
I don't understand...can't we just have the death panels take care of both problems at the same time?

Carlota69
11-23-2012, 04:07 PM
That's fine and I wouldn't have any problem with doing that, except that after we're done we'll find that we're in exactly the same place (within the rounding error) because it would have such a trivial impact on our fiscal condition.

While possible that you are right on the money, if these guys didn't live so high on the hog, maybe they would do more to protect the "entitlements" and have our interest front and center. If they had to deal with the same issues we do, maybe, just maybe, things would be better, at least a little bit. But as it stands, while they have their "entitlements" in tact, they have ****ed things up so bad all over the board that things like Medicare and ss are of no consequence to them and quite frankly have been trampled on and abused. If they had to depend on that as there health cre and retirement, maybe things would be a bit different...

Then again, maybe not. We a talking about politicians right?? Lol

Chocolate Hog
11-23-2012, 04:08 PM
Social Security is in fine shape. No crisis for now. Medicare is the entitlement thats got to be reined in.

There won't SS when I retire because morons like Bill Clinton stole from it.

patteeu
11-23-2012, 04:19 PM
While possible that you are right on the money, if these guys didn't live so high on the hog, maybe they would do more to protect the "entitlements" and have our interest front and center. If they had to deal with the same issues we do, maybe, just maybe, things would be better, at least a little bit. But as it stands, while they have their "entitlements" in tact, they have ****ed things up so bad all over the board that things like Medicare and ss are of no consequence to them and quite frankly have been trampled on and abused. If they had to depend on that as there health cre and retirement, maybe things would be a bit different...

Then again, maybe not. We a talking about politicians right?? Lol

Yeah, I'm not arguing against your observation or your proposal. Just pointing out that it's a small amount of money in the larger scheme of things. BigRedChief posted a thread a few days ago (http://www.chiefsplanet.com/BB/showthread.php?t=266855) that I think you'd find interesting (if you haven't already seen it). Here is the original post:

On CNBC panel:

"I could end the deficit in 5 minutes," [Warren Buffett] told CNBC. "You just
pass a law that says that anytime there is a deficit of more
than 3% of GDP, all sitting members of Congress are ineligible
for re-election.


Good idea or not?

Carlota69
11-23-2012, 04:26 PM
Yeah, I'm not arguing against your observation or your proposal. Just pointing out that it's a small amount of money in the larger scheme of things. BigRedChief posted a thread a few days ago (http://www.chiefsplanet.com/BB/showthread.php?t=266855) that I think you'd find interesting (if you haven't already seen it). Here is the original post:

I'll take some time and read that. And yeah, what Buffet is saying is my point as well.

patteeu
11-23-2012, 05:08 PM
I'll take some time and read that. And yeah, what Buffet is saying is my point as well.

Really the thread topic is what I thought you'd find interesting. I can't vouch for all of the responses. :)

Brainiac
11-23-2012, 10:11 PM
There's a huge reason to cap it. SS is supposed to be a self-funding, forced pension program with limited wealth transfer characteristics, not welfare. It's not regressive, it's actually progressive as is. Because you shouldn't look at it as if it's a tax that leads to across the board benefits, it's a tax on the working class that leads to a working class specific benefit. High income earners pay a pittance into the program relative to their income, but they receive a pittance out of it too because the program isn't intended for them.

If we're going to go this route, why have SS at all? Why not just expand our welfare programs, raise income taxes and eliminate payroll taxes?
Of course, this whole discussion is complicated by the fact that Social Security is not truly a trust fund in which the receipts are earmarked to be used as Social Security payouts. Instead, the Treasury has raided the trust fund over the years to pay for other things and to mask the true size of the federal budget deficit.

It's all a fucked up mess.

mlyonsd
11-24-2012, 07:46 AM
Of course, this whole discussion is complicated by the fact that Social Security is not truly a trust fund in which the receipts are earmarked to be used as Social Security payouts. Instead, the Treasury has raided the trust fund over the years to pay for other things and to mask the true size of the federal budget deficit.

It's all a ****ed up mess.
Didn't think of it like that before. It's like a 50 year old borrowing from his 401k to buy a Corvette and hookers.

I've always thought there shouldn't be a cap but if you're going to throw all that money away what's the point. Hmm.

RedNeckRaider
11-24-2012, 09:05 AM
Of course, this whole discussion is complicated by the fact that Social Security is not truly a trust fund in which the receipts are earmarked to be used as Social Security payouts. Instead, the Treasury has raided the trust fund over the years to pay for other things and to mask the true size of the federal budget deficit.

It's all a ****ed up mess.

We had this discussion before and I was hammered for saying the government had simply stolen the money. Many think this is some sort of charity. I have never taken a dime from the government, and would content if they would just return what I paid them. A little interest would bebe nice~

BigRedChief
11-24-2012, 09:46 AM
. I have never taken a dime from the government I thought this myself. Funded my education out of my own pocket. Funding my son's education out of my own pocket.

One thing I had never thought of.....You have taken money from the government if you have ever worked for an employer and had health benefits. The money you pay for health benefits is paid for before taxes. The credit for this info goes to patteau.

BigRedChief
11-24-2012, 09:51 AM
Of course, this whole discussion is complicated by the fact that Social Security is not truly a trust fund in which the receipts are earmarked to be used as Social Security payouts. Instead, the Treasury has raided the trust fund over the years to pay for other things and to mask the true size of the federal budget deficit.

It's all a fucked up mess.yeah that is complete BS. I would be in favor of a law making the raiding of SS funds illegal. It's suppose to trust fund for those who paid into the fund and their beneficiary's.

RedNeckRaider
11-24-2012, 11:18 AM
I thought this myself. Funded my education out of my own pocket. Funding my son's education out of my own pocket.

One thing I had never thought of.....You have taken money from the government if you have ever worked for an employer and had health benefits. The money you pay for health benefits is paid for before taxes. The credit for this info goes to patteau.

A tax break means I am taking money from the government?

patteeu
11-24-2012, 11:30 AM
A tax break means I am taking money from the government?

A narrow, targeted tax break means the government is subsidizing a favored activity, yes.

RedNeckRaider
11-24-2012, 11:48 AM
A narrow, targeted tax break means the government is subsidizing a favored activity, yes.

So they do not gain from me having health care? Wow I never dreamed I was taking advantage of our poor government :rolleyes: I guess we are even :rolleyes: and I guess they can keep the change~

Iowanian
11-24-2012, 11:57 AM
I'd prefer we allow people who have worked and produced for their entire lives to retire while they are still young enough to enjoy it a little bit. I'm perfectly fine supporting the widows and children of persons who die.


IF we're changing anything, start by removing payment to so many of those who could or SHOULD be earning their own way while they're still of working age.

ROYC75
11-25-2012, 07:18 PM
I'd prefer we allow people who have worked and produced for their entire lives to retire while they are still young enough to enjoy it a little bit. I'm perfectly fine supporting the widows and children of persons who die.


IF we're changing anything, start by removing payment to so many of those who could or SHOULD be earning their own way while they're still of working age.

Agreed, the system is loaded down with many freeloaders.

Yet, we ( the D's ) want to take on so many more in other ways?:doh!:

Brainiac
11-25-2012, 07:49 PM
There won't SS when I retire because morons like Bill Clinton stole from it.
You can't really blame this on Bill Clinton. The practice began in 1983 during the Reagan administration, and has been perpetuated by every President and every Congress since then because it masks the true size of the deficit.

I admire most things Reagan did. This is not one of them.

Psyko Tek
11-25-2012, 09:42 PM
yeah I'll never live to collect
so who gives a crap
drop the limit tax everybody on it

my mom and dad are collecting and they are just middle class workers
so is one grandmother and an uncle

hell I may live that long

but get rid of the limit make all wages and "investments" taxable

FishingRod
11-26-2012, 03:56 PM
I think the cap should be removed but I also think it unfair for the percentage of income tax to go up as you make more money.