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Debunking (Yet Another) Scaremongering New York Times Op Ed on Social Security

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Some readers were decidedly unhappy about a New York Times op-ed over the weekend by Gary King and Samir Soneji that argued the need to reform Social Security was even more urgent than the catfood futures sellers thought because people are going to live longer than the budget mavens assume. Given the op-ed space limits, the authors couldn’t supply much in the way of backup for their views, but the argument was that improvements in longevity due to the decline in smoking and improved cardiovascular health were not adequately reflected in the data.

It’s not clear that we should take this forecast all that seriously. Demographers have upon occasion been spectacularly wrong. One of their big misses (and this was the overwhelming consensus) was in predicting falling population levels for the US in the 1990s, following the pattern of other advanced economies. They didn’t realize how wrong they were until the results of the 2000 Census were released.

Some factors that could offset the favorable developments the authors cited:

1. Long term unemployment reduces life expectancy

2. Diabetes epidemic. The op ed peculiarly mentions obesity in passing and not diabetes. Type 2 diabetes reduces life expectancy by roughly 10 years. Only 3.3% of the population was diabetic in 1980; the incidence rose to 7.7% by 2011.

3. Growing inequality. Inequality has a negative impact on the health of every income group, even the rich

4. Restricted access to health care. I’ll elaborate on this in future posts, but I’m already seeing my insurer doing every thing possible not to pay my bills including invoking provisions of the ACA that do not apply to me (my policy was grandfathered), including trying to not reimburse certain types of preventive care, such as an annual EKG and a urine test (and lo and behold, looking at the list of preventive services, they indeed might not be covered under the ACA).

5. Severe economic downturns. Note this factor may not overlap much with 1. Lifespans fell in 2008. That was likely a result of the severe economic decline (we now know GDP fell at nearly a 9% rate in the fourth quarter) as opposed to long-term unemployment

Now aside from the fact that their premise is questionable, their remedy (more leeching!) is even more dubious. As reader ASK said in an e-mail:

What I am having a very hard time believing is that professors at Harvard and Dartmouth really think that having the government set aside dollars now (ie cause deflation) will do anything to address what they themselves describe as a macro demographic problem. Putting aside whether one thinks what they are describing is or is not a problem, I’m shocked that these guys think their proposed fixes will do anything to address the problem they try to describe.

Reader DS was even more dismissive:
I’ve just read this Op-Ed on Social Security:

http://www.nytimes.com/2013/01/06/opinion/sunday/social-security-its-worse-than-you-think.html?hp

And, all I can say is this is among the most extreme examples of ‘scare the shit out of people headlines’ I’ve ever come across.

Headline: “Social Security: It’s Worse Than You Think”

Contents of the article:

Our brilliant analysis shows that Social Security will run dry not in 2033 as commonly understood by the unwashed public who are being misled by outdated, miscreant and stupid analysts of the government — but instead will actually run out — gasp, gasp — in 2031!!!!

BE AFRAID. Be very very afraid. And now that you know the TRUTH and the FACTS, please contact your Senators and Congress people and policy wonks and, frankly, ANY ONE you can think of to demand we step up and MAKE HARD CHOICES RIGHT NOW instead of kicking this terrible SOCIAL SECURITY CRISIS down the road ANY FURTHER. OH MY GOD!!!

Here’s what you should do IMMEDIATELY: Demand that Congress and the President MAKE HARD CHOICES TO (1) Raise the retirement age so that people who’ve worked hard and put money into the systems actually must wait longer to get anything from the system (and, hey, maybe some of them will die because, you know, many of them are in the bottom 80% who increasingly don’t have enough to live on any way); OR, (2) Tax wages over $113K — which, those of us who are really brilliant know would never happen for a number like say, more than $500K but rather, what really mean is significantly increase the payroll tax for those who are maybe between $113K and, maybe, $150K so that the JOB creators are not prevented from doing GOD’S WORK and, anyway, only the unwashed who make between $113K to $150K won’t really notice that we’re reducing their take home pay now so that we can reduce and/or eliminate their benefits later; OR, (3) limit cost of living adjustments (e.g. you might ACT NOW to support HARD CHOICES like ‘chained CPI” that help further beggar old people and, again, hopefully make some of them die earlier to SAVE SOCIAL SECURITY FROM THIS CRISIS OF GOING DRY TWO YEARS EARLIER!!!!!; OR, (4) JUST FLAT OUR REDUCE BENEFITS (because, hey, Social Security really isn’t or shouldn’t be about, you know, ‘security’ because WE JUST CANNOT AFFORD THAT!!!!

Now, while we are analytically more brilliant-er than the government clods, we do agree that all solutions to this CRISIS (!!!!) must come solely from inside the tiny box of conventional wisdom about how when you face CRISES, you must double down on free markets and austerity and NEVER EVER jeopardizing the stated prices of assets held by TBTF banks and other players.

So, don’t even suggest that one way of responding to THIS CRISIS OF 2031 (instead of OMG 2033) by imagining that the Government might just, well, print fiat money, in 2033 — OOOPS WE MEAN 2031 — if needed. And, forget any COMMIE notions of reducing the retirement age and expanding benefits. Don’t let those pinkos fool you with their mumbo jumbo talk of ‘automatic stabilzers’ and so on. Because, after all, WE ALL KNOW THAT GOVERNMENT IS LIKE A HOUSEHOLD AND MUST TIGHTEN ITS BELT IN TIMES OF CRISIS. Therefore, all solutions must cut, cut, cut. Americans are proud individualists. Government is the problem, not the solution. If old people cannot find their own path to security, well, goddammit, the rest of us cannot afford to coddle them. This is NOT A NANNY STATE.

There’s been a serious ratcheting up in the efforts to create budgetary panic among what is left of the middle class, particularly on social media. Obama has been able to pull off every sellout of his putative base so far. Our only hope is that enough Congresscritters refuse to join the lemmings.

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42 comments

  1. ambrit

    Maam;
    Now would be a good time to actively encourage Tea Party types to ‘obstruct’ this process, because, blast it, it’s favoured by Obama after all, and must be some devious Commie Plot. (How’s that for some political jiu jitsu.) As an aside, how come we don’t hear too much about grassroots Lefty movements? I know the MSM is ‘in the pocket’ but where’s the organized mass protest movement now? No one I talk to here Way Down South has even heard of the Wobblies, and the Street level take on Occupy seems to be ‘a flash in the pan.’ Occupy had better set up a Publicity and Propaganda Committee pronto. (If there is such, I apologize, but, if I haven’t heard of it, with my lurking on this end of the Web, what do you expect of the rest of the general population?)
    Thank you.

    1. direction

      I long for the time when occupiers realize they can co-opt the tea party movement. ripe for the pickings. love this idea.

      Join the tea party. You want to make a difference? Get involved. Get to know who the conservatives are in your community, how they think, and who you can work with and who is a waste of time. Get on the steering committee. If I wasn’t so old and tired I’d do it myself.

  2. toxymoron

    Paul Krugman also stresses (and provides links) that life expectancy at birth may have improved, but that the figure at 65 is much smaller, and does not justify any of these discussions.

  3. LucyLulu

    Yves,
    While I’m not specifically familiar with what is covered under the ACA, more generally speaking, unless you are symptomatic or in a high risk group, neither an EKG or urinalysis are recommended or likely to be useful. I’d be surprised if either would be covered under routine preventive care of the ACA, without some clinical basis for the tests being done. In fact, the verdict is out on whether EKG’s are recommended for those even with risk factors in the absence of symptoms, e.g. chest pain (unlike testing urine for the presence of sugar or protein in high risk groups, for example).

    Insurance companies are increasingly balking about paying for tests and procedures that have not been shown to be cost-effective. While I’m not generally a fan of the private insurers, we have a 30% waste rate in U.S. healthcare that contributes in large part to our skyrocketing costs.

  4. from Mexico

    A couple of posts by a young blogger (I think he’s a college student studying economics) who posts on the MacroBusiness blog (that hails from Australia) are germane to this conversation.

    First, there’s this passage from one of his posts that alludes to what I have referred to as the sado-masochistic, dominant-submissive impulses built into the human psyche, which look to be the principle motivating factors behind Austrian and neoclassical economic morality:

    But in reality income rank, or relative income, matters more than absolute income. Which means small powerful groups will generate pressure for inefficient policy to increase their relative income, with it, their relative power.

    “Economists and the Powerful”
    http://www.macrobusiness.com.au/2013/01/economists-and-the-powerful/

    Then in another post there’s this analysis:

    It baffles me that an area of economic research with very important policy applications has produced more than 45,000 articles and still comes to a general consensus that is completely incorrect.

    I’m talking about the macro-economic effects of superannuation….

    Translated, that means that a pension system that requires individuals to save through their lifetimes, to fully fund their retirement, is better than a system where the current generation of workers simply pays the current generation of retirees a pension through the tax and transfer system (a pay-as-you-go model).

    “The pre-saving myth of superannuation”
    http://www.macrobusiness.com.au/2013/01/the-pre-saving-myth-of-superannuation/

  5. LAS

    The New York Times has gone over the top in the last few years with printing propaganda as science. Maybe it is how they make their money these days. Indeed, if you really think about it, most of the paper is about selling products, services, ideas: real estate, autos, style, ideas.

    Just last week they did a one-two on the positive health effect of being overweight. Actually, there was no creditble science behind that. It was based on a meta-analysis of hand-picked observational studies. In short, proof of causation that a little pudge is healthy has been fudged; in fact, there’s NO evidence. This was immediately followed up by an editorial written by a shill. It wasn’t science but propaganda, evidently aimed at disarming food/bev/safety regulations by manipulating public opinion.

    Their social security editorial is another instance of funded propaganda to manipulate public opinion. The charts alone are terribly misleading and have nothing to do with actual life tables. The language is terribly biased and not the least truly informative.

    The New York Times is now making it a standard practice to mislead, quite like how they functioned in the days before the second Iraq war to mislead the public toward compliance to bad ideas.

  6. Don Levit

    The scary part is not that the trust fund is exhausted 2 years earlier.
    The scary part is that the trust fund is exhausted today.
    The same financial,scenario in 2033, if the fund is exhausted, is taking place today: new general revenues are needed to make up for the cash shortfall.
    This is because, according to the Social Security Administration, “The net cash flow during any period is total non-interest income less total outgo.”
    So, in 2011, total negative cash flow was $45 billion, adding to the deficit.
    And this negative cash flow adding to the deficit is estimated to increase until trust exhaustion.
    http://www.ssa.gov/OACT/ProgData/allOps.html.
    Don Levit

    1. from Mexico

      Don Levit says:

      The same financial,scenario in 2033, if the fund is exhausted, is taking place today: new general revenues are needed to make up for the cash shortfall.
      This is because, according to the Social Security Administration, “The net cash flow during any period is total non-interest income less total outgo.”

      I can certainly understand the absolute panic sweeping over corporations and the rich.

      The cardinal sin, after all, would be to pay workers some interest on their nearly $3 trillion Social Security Trust Fund, interest that just might have to be paid for by taxes levied on corporations and the rich.

    2. Eric377

      That’s like complaining that paying your mortgage is a negative on your cash flow. Yes it is and it is also what you contracted to do, so get over it.

    3. OpenThePodBayDoorHAL

      OK then, riddle me this:
      We can borrow in unlimited amounts to bail out gambling banksters, or to wage Permanent War across the globe, but something for the actual PEOPLE (like Soc.Sec) must pay it’s own way from Day 1? I mean why don’t we ask the banks to pre-fund their next bailout (there’s always a new one just around the corner, like this week’s gift from Obomba to BofA)?

  7. Mary Bess

    The NYT has been unreliable for decades, particularly regarding coverage of the Mid East. Standard Rule: start reading from the bottom where the editorial hand lies a little lighter and the reporter may be able to sneak in some real news.

  8. Chris Engel

    Well at least they gave the right-wing a piece of science that they can get behind.

    I bet Republicans are going to turn into regular old enlightened mathematicians when they realize the end message of this study is a justification for cutting social spending.

  9. docG

    As I see it, it’s all very simple. If a crisis exists in the funding for Social Security, just raise the limit on taxable income and or include all income, not just payroll income, i.e. income from capital gains, dividends, etc. SS is already a hugely unfair regressive tax, so what’s the problem with making it more, or completely, progressive instead?

    And I’m wondering, Yves, why this solution would bother you, since it seems so patently fair.

    As far as “printing fiat money” is concerned, sorry, but I’ve been reading what various “experts” have had to say on this topic for some time, and I must say I still don’t get it. Nor do I think such an idea will ever go over with the general public, which will smell a rat, even when smothered in a bouquet of organically grown flowers. If we can get away with printing money, “fiat” or otherwise, then why bother collecting taxes at all?

      1. docG

        I just read both documents, and as I see it they read more like manifestos than explanations. Obviously these folks have a theory, and they’ve offered the gist of it without even attempting to back it up with any real analysis. This theory sounds pretty crackpot to me. Reminds me of Gertrude Stein’s great characterization of Ezra Pound: “the village explainer.”

        I couldn’t find anything resembling an actual insight in any of it. So some people think “taxes drive money.” So what? The message I got loud and clear in 2008 (it was actually clear long before that) was: “Do NOT trust anything any economist says.” What has changed since then?

        Looks to me like just another wacky oversimplification of an extremely complex issue. To quote one of Yves favorite expressions: “What could go wrong?”

        And I’m still waiting for my question to be answered: If we can get away with printing money, “fiat” or otherwise, then why bother collecting taxes at all? Or are you saying there’s no need for taxes, that they’re just a huge scam? That sounds like a Tea Party line, so I’m wondering where this is coming from. If George Bush had come up with that sort of thinking back when he was in charge, liberals would have been all over it. So I’ll ask it again: What has changed?

        1. Jamie Elswick

          Your mistrust of economists is well-placed. I would caution you in your use of the word “we”, however; “we” do not get to print money (well “we” can, but good luck getting anyone to take it) – “they” print money, and “they” can print money because “they” are the ones with all the guns.

          To answer your question – if they can print money, why have taxes at all – the answer is simple: supply and demand, one of the very few things “economists” tend to actually get right.

          The rule of supply and demand is this: all other things being equal, if you increase the supply of something, you reduce the demand for that thing. This is why air is very cheap but platinum is rather expensive; one is rather abundant (high supply) while another is relatively rare (low supply).

          So: when you increase the amount of currency by “printing money” (something that is not possible when a currency is freely redeemable in something tangible), you reduce the value of each unit in proportion to the amount of new currency that was created. If they print too rapidly, inflation spins out of control, the plebes catch on to the scheme and start dumping their increasingly-worthless cotton/linen rectangles (or, even less tangible, bits and bytes out in the ether) and you get your Weimar Republics, your France circa John Law or again after La Revolucion, you get modern day Zimbabwe, and on and on and on. The ones who run the presses KNOW this, and so they do their best to keep the printers on “low”, printing only enough new moolah each year to make them and their buddies rich, while chipping away at the savings of the plebes at a slow enough rate that they do not notice the erosion that is taking place right in front of their eyes.

          Taxes remove money from the economy – without holding a gun to everybody and sucking away up to and even over half of their wealth (Income taxes x2? Property taxes? Gas taxes? Sales taxes? Liquor taxes? Estate taxes? Capital gains taxes? Payroll taxes? Social security taxes? Medicare taxes?), the newly printed money would quickly cause inflation to spiral out of control.

          The questions that we should all be asking are so far away from this MMT nonsense, questions like:

          Why do people pay taxes?
          What would be done to them if they didn’t?
          Would the system work without the threat of violence?
          Is threatening people to force them to give up the fruit of their labor, to force them to use a certain kind of money, to confiscate their wealth – is this really the best way to do things, both from a practical as well as a moral standpoint?

          People can’t understand what’s happening in the realm of economics because they are blind to the violence in the system that fuels EVERYthing. They are fish swimming in an ocean of blood that they cannot see, and they helplessly wonder why they are floundering.

          See the violence. See these “governments” as the human tax farms that they are. Ditch the collectivist mentality, and you may begin to understand.

    1. docG

      I’d like to add one more thing to my original comment. If SS were taxed on the basis of ALL income, rather than only the first $108,000 or so, and taxed on a progressive basis, as is income tax, most rates would be much lower and more affordable than the tax is today. And that would make a huge difference.

      One thing Obama’s misdirections have done is draw our attention away from just how destructive the SS tax actually is. More and more of us are now “contract” or “temporary” workers, meaning our employer has NO obligation to pay any of our SS tax, which means the full amount must be paid by the worker — that’s a huge and very unfair drain on one’s income. And if we add the fact that employers who DO pay the tax factor it in when determining wages, then in reality the entire burden of this tax falls on the worker.

      It amazes me that so many liberals are now talking about funding SS on the basis of some sort of wild “fiat” money printing scheme, when the obvious answer is the complete overhaul of the payroll tax system — to make it both more fair and more sustainable. Not to mention the major reduction in the tax for the 99% that this would entail.

      1. Carla

        You are right to support raising the cap on wages (and, yes, even including what is so nicely called “unearned” income) subject to the Social Security tax. It should be removed entirely.

        However, that has nothing to do with fiat money. We have a fiat money system, there is nothing theoretical about it. Nevertheless, 97% of our “money” is created as interest-bearing debt when private banks extend loans. It is usury, and it is not sustainable.

      2. mac

        For many years, nearly 30 I paid both SS and into the Texas Teachers retirement system(roughly 15%) it worked good. I also later did some contract work where I paid both employee and employer SS. I survived probably others would also.

  10. Ché Pasa

    The media’s anti-old-folk propaganda has been running hot and heavy for years, and the NYT has never missed an opportunity to raise the alarums and fan the flames of panic about the burgeoning problem of the Old Sucking Up All the Good.

    I’m old enough to remember when they did this same sort of thing about the young.

    It’s in the nature of the business, I guess. Fear sells, doesn’t it?

    With regard to the Social Security “crisis”, we’re seeing the heavy hand of propaganda everywhere over the lifespan question and the “newly discovered problem” of fewer workers especially. Apparently those are the ones that resonate with the focus groups: OMG! We’re living longer! Only two workers for each retiree!

    The most bogus thing about this propaganda is that somewhat longer lifespans (it’s not that much for most people, and for several population segments, lifespan has been reduced not lengthened) and fewer workers per retiree were built in to the Social Security calculations long ago. These factors are not new discoveries. (Greenspan was nattering about them in the ’80′s, Birchers were contemplating the horror of it all in the ’50′s and so on.) Nothing has to be “done” about them, they’ve already been factored in.

    Of course there are alternatives to the doom scenarios and all the media-generated panic. The retirement age should be lowered, not raised, and Social Security benefits should be increased, not lowered.

    But the propaganda machine is so wedded to raising the retirement age and reducing benefits that the alternatives are essentially unheard.

    As many have pointed out, the propaganda about “entitlement reform” tracks nearly exactly with the propaganda barrage leading up to the Iraq War. The propaganda campaign succeeded magnificently.

    The War not so much…

    So here we go again.

    1. Chauncey Gardiner

      We’re all very tired of the relentless use of Fear in organized campaigns of emotional, psychological and economic abuse by the destroyers and those with an overriding desire to concentrate wealth and political power in their own hands. The various reactions of the abused to their abuse are as foreseeable as those of an abused child who comes of age.

      Why have and do they use Fear based on lies and gross misrepresentations as the integral part of their relentless propaganda campaigns?… Because they believe Fear trumps reason, truth and Democracy… and the tactic has worked for them over a prolonged period of time.

      The proponents of this view seem to think that the various totalitarian and surveillance structures they have installed, including the propaganda, will enable them to continue to control the system… Perhaps.

  11. Robert Asher

    It is time for the New York Times to merge with the Wall Street Journal. Or maybe Fox News will buy the New York Times and let TV copy writers present the news. This is what has happened with the Hartford Courant.

  12. Larry Headlund

    I wonder why the NYT didn’t go with a shorter headline: “Greedy Geezers Refuse to Die.”

  13. sk

    Additionally, for some people, like Gary King and Samir Soneji, life expectancy can be drastically reduced if they continue to write stupid articles in a newspaper apparently run by corrupt people.

  14. Ping

    Along with the NYT, I don’t know why I indulge in ‘Meet the Press’ (sponsored by Boeing) anymore.

    Lindsay Graham et al, in a permanent scowl, repeats the entitlement hysteria as sole cause for deficit, while NOT ONE WORD reference to our military spending (something like more than the rest of the world combined?).

    The Iraq war cost 1 trillion, Afghanistan approaching that and we have troops in 32 countries….? Pentagon waste is phenominal. They are all so obiously captured by our permanent war industry.

    What about examining foreign aid? Lindsay Graham then goes on to adamantly defend our taxpayer support of Israel who I understand has better safety nets for it’s citizenry than US. What a bunch of hypocrites. We can sent 10′s of billions to Israel for their uber military and who knows what else and Pakistan knowing where much of that funding ultimately winds up…..

    Moderator Dick Gregory NEVER addresses other deficit causes (nor Simpson & Bowles also guests) and allows the premise that entitlements are the primary cause of our deficit to stand.

    Drastically cut miliary, re-examine foreign aid, a more fair tax code, means testing for other benefits.

    Shift the enconomy from permanent war to productive endevours (sustainable energy etc.)

    It’s not all so simple of course, the whole financial structure must be addressed…but this nation is collapsing from the stranglehold of it’s intrenched special interests and the well funded think tanks spewing this stuff for public compliance will be the rope to hang themselves and everyone else.

    1. Wat Tyler

      Lindsay Graham represents South Carolina which is packed full of military bases thanx to decades of one Strom Thurman. The military IS the SC economy.

      Jim

  15. Max424

    For 30 years the New York Times was a big part of my life. Not huge –it’s not I like craved the thing, couldn’t go on a walkabout and spend a month without it. But big, in that small/big way, because admittedly, it was fairly significant part of my life.

    In that three decade stretch, I would say I averaged 35 Sundays per year, plus 2.5 dailies per week. That adds up to about 170 NYTs mostly or partially digested over the course of a year, all purchased semi-spontaneously at the newsstand-deli-grocery slash breakfast nook. So that’s how big.

    And it was great feeling, waking up on a Sunday with nothing to do, in my toasty slippers pointing at the first person I tripped over, saying: You, yeah you, I’m buying breakfast as long you agree not to talk. My paper awaits. The deal is, you can break silence only to ask puzzle questions, but that’s it. Any random gabbing is a breach of sanctimony and you gotta pay the gratuity.

    Remember, my party tips 50%. Are you in?

    But I quit the NYT cold turkey three years ago, when it became clear, practically from day one of the gulf spill crisis, that the The Bag Lady had given up any pretense of being anything other than a propaganda organ for the worst angels in our government.

    Do I miss it? Yeah, I do. I miss it bad sometimes. Especially on Sundays, when I find myself Jonesin.’ But what had to be done was done.

    I am bitter? Yeah, a little. But that’s not it. In my metaphorical gut, I feel a weird, Chief Joseph lonely thing, for when I look around, I see less and less of my people. In fact, my people, vanishing New Deal liberals, are as rare now, as World War II veterans, and are exiting the stage daily at the same approximate rate.

    There is, of course, a big difference. The Two vets are dying, their souls, permanently extinguished,* while my people are freely selling theirs, while simply morphing into a living something else.

    *Or, whatever.

    1. Sufferin' Succotash

      The NYT lost me with Judith Miller and the Iraq War.
      Just two reasons why I even look at it: Krugman and Crosswords.

      1. Max424

        Yeah, Miller and the pro war rah rah crap, and the fact that the paper sat on the NSA wiretapping story for months, allowing Bush to get reelected, did it for me too.

        But an organization that big has lots of factions, so I kept on supporting the paper (by buying it), thinking there was always a remote possibility that an in-house clique with journalistic integrity might stage a last ditch coup d’état!

        Giggle. The gulf put an end to that broken oil pipe dream. It was clear after that, it didn’t matter who was power, the NYT is in the tank, and it will always stay in the tank because it is safer there.

        When Bob Herbert and Frank Rich left on basically the same day in early 2011, it was like two exclamation points at the end of a headline, declaring: The New York Times is Dead!!*

        *And the subhead reads: Suicide Ruled the Official Cause

  16. Hugh

    If jobs had been kept in the US instead of being shipped overseas, if productivity gains had gone to workers instead of to the unproductive rich, if the income cap had been removed and the payroll tax applied to all income from whatever source, Social Security would be awash in funds into the indefinite future. But none of this happened and the rich having stolen all the money don’t want to see any of it end up back in the hands of those they stole it from.

    Our media are creatures of the corporations and the rich. The media have been their propagandists for years. It is just that their propaganda is taking on an increasingly hard edge, more blatant, more in your face.

    1. petridish

      “If jobs had been kept in the US instead of being shipped overseas, if productivity gains had gone to workers instead of to the unproductive rich…”

      This is absolutely the crux of the problem, isn’t it? Reward the removal of the means to make a living and then villify the victims for not being able to make a living. Does it get any more twisted than this?

      It’s impossible to believe that no one saw this coming. What’s mystifying is the absolute silence with which it’s been accepted.

  17. FJP912

    Yves, I agree with just about everything you say, except for pooh-poohing the idea of removing the cap on the SocSec payroll tax. It is a ridiculously regressive feature. Removing it imposes absolutely zero burden on everyone earning less than the current cap, whereas almost everything else you could do to improve SocSec’s balance sheet by the same amount does.

    I agree that just raising the cap, rather than removing it entirely, is a less equitable solution. I still think you have to weigh it against what would you do instead. The only other thing you can do that impacts only high income people is to means-test benefits. If you think removing the tax cap is politically tough, try means testing. So maybe we should say to the top couple of percent, no, you can’t have it both ways. Either pay now (lift cap) or pay more later (means testing).

    Bu the way, so you don’t think I’m happy to raise taxes just on other people, I “benefit” from the cap. I use quotation marks because I’m not sure having a little extra money in my paycheck around Christmas shopping time long-term outweighs the increased risk to my prospective benefits after retirement.

    1. Yves Smith Post author

      That was from DS, not me, and you seem to be missing DS’s snark. The NYT authors included raising the ceiling on their list of possible solutions for sake of completeness, but tried to make it sound like a bad option.

      1. Aquifer

        Here’s what i read re the cap – “A second option is to increase payroll taxes, for example by taxing wages over $113,700, the current earnings limit.”

        I didn’t notice any suggestion that it was a bad idea …

        So it seemed to me that a good response would be – “well, even if things are as bad as you say (which I don’t concede), you have pointed out a simple fix – raising the cap, which would not only help funding but, especially if it were made progressive, remove the stigma of regressiveness – So thanx for the suggestion! We will tell our reps that is one course you folks recommend as a solution!” And then the ball is in their court …

        1. Bob Treacy

          I know Gary. He’s not shilling for any particular position and I certainly don’t see how he was slanted against raising the earnings limit. He applies numbers to social science. He’s talking about shoring up the Social Security fund rather than wrapping it in the deficit/entitlements context. That said, I cringe at the notion of the current Congress taking up Social Security reform.

          1. Aquifer

            i didn’t suggest he was – i merely suggested that we take him up on his option #2 and tell our legs he suggested it as a solution – if he is not “shilling” he should have no problem with that, n’est pas? Or does he not recommend it? Of all his “options” that seems to me the one most likely to “solve” the problem he presents while least likely to harm the potential recipients …

            If you have a quarrel in this respect, I don’t think it is with me …

          2. Bob Treacy

            Aquifer,
            I didn’t mean to quarrel with you, merely to reinforce your point that they didn’t say raising the cap was a bad idea. Your post was quite fair. Replying to it seemed like an appropriate place to say that I’m sure Gary is not part of the campaign against Social Security, as others (not you) were asserting. When I saw the op ed on Saturday, I knew they were going to get a strong reaction here.

  18. Brooklin Bridge

    Our only hope is that enough Congresscritters refuse to join the lemmings.

    That would be like hoping that the rain won’t be wet.

  19. Brooklin Bridge

    The inevitability of the assult on the safety net is much like the inevitability of getting John Brennan confirmed as director of the CIA this time around as opposed to four years ago. Then, it would have been impossible, today – ho-hum, it’s basically a done deal. It just needs a little bit of the usual MSM fake drama as a minor indulgence of mass torture -to keep in practice, I suppose. They could spare us the agony of living this cheap soap opera since we know the outcome anyway.

    Here’s a paragraph on the subject of Brennan by Greenwald. The moral and ethical free fall that Obama has architect-ed (not passive), holds equally true for social justice and “fair play”, that is for the safety net, as it does for civil liberties.

    It is a perfect illustration of the Obama legacy that a person who was untouchable as CIA chief in 2008 because of his support for Bush’s most radical policies is not only Obama’s choice for the same position now, but will encounter very little resistance. Within this change one finds one of the most significant aspects of the Obama presidency: his conversion of what were once highly contentious right-wing policies into harmonious dogma of the DC bipartisan consensus. Then again, given how the CIA operates, one could fairly argue that Brennan’s eagerness to deceive and his long record of supporting radical and unaccountable powers make him the perfect person to run that agency. It seems clear that this is Obama’s calculus.

    Full article here: http://www.guardian.co.uk/commentisfree/2013/jan/07/john-brennan-dishonesty-cia-director-nomination

  20. diane

    Oh my, I spent so much time yesterday verifying the data I wrote in a comment about very real issues regarding BrightSource/Ivanpah (that has now been refused twice on the Links pages, by “moderation,”), that I missed this post yesterday.

    Ironically, I actually discovered your post after checking in at the posts at Stop Me Before I vote Again, which has an excellent post on it ( http://stopmebeforeivoteagain.org/2013/01/for-once-the-times-gets-it-right/ ), and then doing a search on the piece to see which other sites might have commented on it.

    Thank you so much for posting it.

    The Times hit piece seems tantamount to stating that it is okay for millions to slowly and painfully die, with no access to healthcare and housing, or commit suicide, especially where they imply that perhaps there should be no retirement, yet never acknowledge that there has been massive age discrimination, especially against females.

    They’re condoning mass suffering. Looking at the current professional titles the authors hold provides a clue as to the massive corruption that surrounds us.

    1. diane

      (By the way, if anyone has a clue as to why my referenced posts were booted, it would be nice to know, so I don’t spend hours verifying data to have it booted twice, it certainly wasn’t trollish, nor were the url addresses suspect, which were all ‘Fourth Estate’ and Government urls. I’m sorry I have not sent any contribution but I am simply not able too.)

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