There's little debate in America that with baby boomers retiring, Social Security and Medicare are on a collision course with bankruptcy.
Regardless of this inconvenient truth, powerful media figures like New York Times columnist Paul Krugman stand in the way of any meaningful reform to these programs that might lead to their long-term viability.
Krugman proved that once again in his article Friday:
Let’s turn next to Social Security. There were rumors beforehand that the commission would recommend a rise in the retirement age, and sure enough, that’s what Mr. Bowles and Mr. Simpson do. They want the age at which Social Security becomes available to rise along with average life expectancy. Is that reasonable?
The answer is no, for a number of reasons — including the point that working until you’re 69, which may sound doable for people with desk jobs, is a lot harder for the many Americans who still do physical labor.
But beyond that, the proposal seemingly ignores a crucial point: while average life expectancy is indeed rising, it’s doing so mainly for high earners, precisely the people who need Social Security least. Life expectancy in the bottom half of the income distribution has barely inched up over the past three decades. So the Bowles-Simpson proposal is basically saying that janitors should be forced to work longer because these days corporate lawyers live to a ripe old age.
So, in Krugman's view, any rise in the age at which you can receive Social Security is verboten. This is despite the fact that when Social Security was first created, life expectancy was 57. Now it's 77.
That's not to dismiss Krugman's point about differing life expectancies by income. As his own newspaper reported in 2008:
In 1980-82, [Gopal K. Singh, a demographer at the Department of Health and Human Services] said, people in the most affluent group could expect to live 2.8 years longer than people in the most deprived group (75.8 versus 73 years). By 1998-2000, the difference in life expectancy had increased to 4.5 years (79.2 versus 74.7 years), and it continues to grow, he said.
What this means is the poor in 2000 were still living almost 18 years longer than the average person was in 1935 when Social Security was created. But let's take this further:
“If you look at the extremes in 2000,” Dr. Singh said, “men in the most deprived counties had 10 years’ shorter life expectancy than women in the most affluent counties (71.5 years versus 81.3 years).”
So, even in the most deprived counties in America back in 2000, men were still living 14.5 years longer than the average person in 1935.
Readers are advised that the Congressional Budget Office released similar figures in April 2008.
Add this all up and rich people do live longer than poor people. I'm not sure why that would be a shock to anyone. But the fact is that even the poorest people in our country are still living almost 15 years longer than folks did when Social Security was created.
At the time, benefits came at age 65.
This number has barely changed in the past 75 years, as today, depending on the year you were born, you can begin receiving benefits between 65 and 67.
As such, although the poorest Americans have seen their life expectancies rise by almost fifteen years, many still get to retire at the same age as people did 75 years ago when people weren't living nearly as long. The "youngest" Americans born in 1960 and thereafter have to wait only two years longer than their grandparents and great-grandparents did.
Hardly seems equitable, does it?
The bottom line is that the easiest way to solve all the long-term budgetary woes of Social Security is to raise the age at which benefits start. Toward this end, the deficit reduction commission is recommending this age move up only one year to 68 by 2050, and another year to 69 by 2075.
But Krugman and his ilk can't except that, and use this income mortality inequality issue to argue against such a minor change despite life expectancies amongst the poorest Americans being almost fifteen years greater than when this program first went into effect.
Unfortunately, this shows where Krugman and his ilk are: the only tinkering they will accept to Social Security is lifting the income threshold at which people contribute. This obviously comes with no increase in benefit to such people.
In fact, if Krugman and his ilk had their way, benefits would be means-tested whereby folks that made over a certain income wouldn't receive benefits at all.
In Krugman's socialist world, the highest wage earners would pay far more into this system than they currently are, and if they properly set up for their own retirements thereby making over a certain amount when they became eligible for benefits, they wouldn't be entitled.
Sadly, it's this kind of thinking from the left and their media minions that make it impossible to envision any material reform to Social Security until the program goes bankrupt and legislators are forced to address the crisis.
Until then, expect Krugman and others in the press to continually push back against any changes that involve even the slightest adjustment to retirement age.
