It’s Broke; Fix It
Two op-eds today in favor of Social Security reform. First up, John Kasich:
How do we get out of this mess? To preserve the system for the long term, we must change the way first-time benefits are calculated. Growth in initial benefits should be linked to the consumer price index – not to wage growth.
A switch to price-indexing from wage-indexing would accomplish two things. It would eliminate the need for future payroll tax increases, and it would still allow initial benefits to rise over time, albeit at a slower rate. Instead of rising eighteenfold over the next 75 years, benefits would likely increase by a factor of eight.
Sensible, perhaps – but any kind of “cut” in benefits is almost certainly doomed to failure. You and I know that an eightfold increase is hardly a cut, but that’s not how it would play in Washington and the MSM.
Next up, Chile’s Jos
What I find incredible is that, in the decade or so since reestablishing full democracy, Chile has managed to catch up to the US quite handily in regard to standard of living and economic and political freedoms. Are they now overtaking us in public policy?
Maybe General Pinochet deserves the last laugh after all.
Would attaching to the price index be effected if and when inflation returns?
sorry off topic but the ny
firefighter that was in that
famous picture at ground zero(flag)
has died in iraq….
hat tip little green footballs
headline
terrorist won’t vote
the link is from
comment number 11
the ny firefighters name is
Christian Engeldrum
Add to these two columns the column by George Will regarding Alan “the Undertaker (hat tip: Ayn Rand)” Greenspan as a possible new Treasury Secretary, and you might be onto something.
Third Rail No More?
The push for Social Security reform in the next Congress has begun in earnest – and is showing up in…
It’s Broke; Fix It, Parts I and II
Part I: Social Security. Part II: Society itself….
Columns like this vividly illustrate the opportunity cost of giving regular space to Paul Krugman.
What’s really ironic is that if I remember correctly chile’s plan was invented at University of Chicago.
“Where were they on Social Security when John Kerry was dodging the issue?”
Throwing softball questions like if you were a tree, what would you be?
Before we go off the rails and drool over Chile, it was a dictatorship. It’s easy to enact reform when you’re a dictator because no one can oppose you. That’s why the Social Security changeover went so smoothly, because they could essentially enact a pure plan and not give a damn about the political fallout. That won’t happen in the US. While I back privatization, when I look at the scare mess the Medicare prescription drug plan was I fear what US politics is going to do with a privatization of Social Security and what kinds of extra, plan-ruining atrocities will find its way into the final plan.
http://www.american-patrol.blogspot.com
I like the idea, but at the same time, why do I need the government to set up a Roth Ira?
A-P, you don’t — if it’s the money the government is already letting you keep from your paycheck.
But if it’s the money the government confiscates from your paycheck on a regular basis, any reform’s gotta be done by the government.
Of course, a lot of folks even my age are already writing off all that FICA money as a lost bet. Woulda been nice if we’d had any choice about the bet, is all.
I hate to sound like a liberal, but the current system is unfair. Payroll taxes place a heavier burden, by percentage of gross wages, on those that come in under the annual wage limit of $87,900. The fix is easy, however untenable politically. Cut the Social Security portion of FICA to %5.00 and raise the wage limit to twice or better it’s current level. Maybe $175,000 or even $200,000.
…and then means-test benefits!
…and then means-test benefits!
The baby boomers aren’t going to give up one red cent of their entitlement, even as it breaks the backs of the Gen Xers who will have to support them. It doesn’t matter which party is in control. There will be plenty of pandering to the boomers regardless of whether it’s good policy. The boomers are just too damned important as a voting bloc for anyone to risk causing them any pain. Someone will have to sacrifice, but it won’t be them.
I don’t expect to see any of the $50K plus I’ve paid in to date. However, if they raise my payroll taxes or reduce my future benefits just to keep the “me generation” from whining, it’s open season.
My parents will wonder why I’ve put them on an ice floe with a 2 liter bottle of vodka.
…and then means-test benefits!
Keep your muddy lunchhooks off my dadgum benefits! I had 15% of my wages confiscated for nearly 50 years. That’s MY money, Buckaroo. What are my chances of getting it all back?
The UK’s state pension is linked to RPI and not to incomes. It’s little wonder that it’s closer to solvency than any other country in Europe.