A Modest Proposal for Social Security and Medicare Reform
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  A Modest Proposal for Social Security and Medicare Reform
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Author Topic: A Modest Proposal for Social Security and Medicare Reform  (Read 3176 times)
Bono
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« on: August 18, 2008, 02:02:05 PM »

John B. Shoven and Gopi Shah Goda touch the third rail.


    the Normal Retirement Age for Social Security in 2004 would have to be at least 71 (using lowest number in the table) and more likely 73 or 74 (using the gender blended results from Methods 1 and 2) in order to be consistent with the real age of 65 in 1935. Using the same logic, the age of Medicare eligibility would have needed to have been advanced by at least five years. Such adjustments would be politically difficult, but age inflation and the lack of adjusting for it has quite a bit to do with the solvency problems of Social Security and Medicare.

Arnold Kling at EconLog comments:

I cannot think of any policy change that I have advocated for longer or more often than that of raising the age of eligibility for Social Security and Medicare. Keeping the age of government dependency at 65 is the most insidious and quantitatively important reason for government expansion and the pending rise in tax rates.

The tendency is for the last few years of life to be ones of severe medical problems. However, those last few years are being pushed back. This would mean that if people have to work longer to support themselves, many would be healthy enough to do so (and others could be entitled to disability insurance). However, the reduction in Medicare spending would be relatively small, because many of the people who would lose Medicare eligibility would be relatively healthy.


This alone would have an enormous effect on government spending, would be relatively painless and, I would expect, noncontroversial. Of course, I can already hear the seniors' associations whining.
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opebo
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« Reply #1 on: August 19, 2008, 06:25:33 AM »

Why on earth should we accept a 'real age' consistent with 65 back in the 1930's?  Has nothing gotten better since the 30s?  Has not worker productivity increased by many multiples? 

Please, we should be talking about lowering the retirement age, working hours, increasing wages, and providing health care.  Accepting this nonsense about reducing quality of life to increase profits for the owning class is just idiotic.
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Bono
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« Reply #2 on: August 19, 2008, 06:35:52 AM »

Why on earth should we accept a 'real age' consistent with 65 back in the 1930's?  Has nothing gotten better since the 30s?  Has not worker productivity increased by many multiples? 

Please, we should be talking about lowering the retirement age, working hours, increasing wages, and providing health care.  Accepting this nonsense about reducing quality of life to increase profits for the owning class is just idiotic.

If you reduced the amount of people working so that total productivity would be the same as the 30s, you'd get 30s living standards.
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NDN
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« Reply #3 on: August 30, 2008, 07:06:49 PM »
« Edited: August 30, 2008, 07:08:50 PM by Giggle Cream »

We've already raised the age which retirees can expect benefits.  That's not a realistic solution politically anymore. A more reasonable proposal would be to gradually reduce benefits for the well off (i.e. 'the rich') and encourage private savings (e.g. expanding tax-free retirement accounts). Social Security really was never intended to be a guaranteed pension scheme for everyone.
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opebo
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« Reply #4 on: August 31, 2008, 06:42:26 AM »

Why on earth should we accept a 'real age' consistent with 65 back in the 1930's?  Has nothing gotten better since the 30s?  Has not worker productivity increased by many multiples? 

Please, we should be talking about lowering the retirement age, working hours, increasing wages, and providing health care.  Accepting this nonsense about reducing quality of life to increase profits for the owning class is just idiotic.

If you reduced the amount of people working so that total productivity would be the same as the 30s, you'd get 30s living standards.

The precise point was that productivity has improved far, far more than have living standards for workers, Bomo.   Please try to read posts and understand before replying.
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True Federalist (진정한 연방 주의자)
Ernest
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« Reply #5 on: September 18, 2008, 10:33:45 PM »

We have been slowly increasing the age at which full benefits are paid out.  Continuing that slow increase so that instead of age 67, it eventually takes age 70 to reach full benefits is a sensible first step.  More so that reducing benefits or increasing the payroll tax rate or teh cap on what gets taxed.
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Smid
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« Reply #6 on: September 18, 2008, 11:25:05 PM »

In Australia, we have a 9% compulsory superannuation contribution for all employees earning over a certain amount - I think that amount is about $450. It effectively resulted in a 9% pay rise for all employees when it was introduced - so wages didn't increase for a while afterwards (it effectively results in compulsory savings). There may have been some form of business tax cuts or something at the same time as it was introduced, to reduce the burden on business. The Government provides the pension to everyone over the age of, I think 65 (women is 63 I think, although it increases by a year every two years until reaching parity with men), so it forces people to save for their own retirement, but still protects those who don't amass enough savings themselves. I think it's a fairly balanced approach that doesn't disadvantage the poor, while still not burdening the government to the same extent as a straight out pension would.
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John Dibble
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« Reply #7 on: September 22, 2008, 12:34:36 PM »

My modest proposal for Social Security and Medicare Reform:

Kill the least intelligent half of the Baby Boomers, and use their bodies to make a variety of Soylent products.
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