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:
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:
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.