Wednesday, July 14, 2010

Instead of cutting Social Security, why not expand it?

I'm not the first person to suggest this, but it hasn't quite percolated through the Washington Bubble, quite yet. While it's not "conventional wisdom," it probably should be. All this deficit commission cat food commission talk of cutting Social Security should get nixed, immediately, and replaced with talk of expanding Social Security. Now is honestly the perfect time to do it. Why? Some of the people least likely to find new jobs in this economy are people in their 50s -- and guess which age group is one of the least likely to be unemployed?

Creating an early retirement age for Social Security, maybe with reduced benefits and perhaps an increased ability to offset those benefits by allowing them a slightly increased cap on what they can earn while on Social Security while still being able to maintain eligibility, would help solve the unemployment problem in two major ways. The first being that it would immediately help those people on the cusp of Social Security, who don't have a job, without having to worry about perpetually extending their unemployment benefits and redoing that political fight every 3 months. The second being the ability to lure some people into early retirement, thus opening up jobs for everyone else. There are lots of people who are 59, 60 and 61 who would think of retiring a bit early if they could have just a little help in the years between 59 and 62. Why not give them that push, when our job figure's so rotten.

Furthermore, while the cat food commission is obsessed with the zombie lie that Social Security is in trouble, it's pure myth. Social Security is set to take in more than it gives out until 2037, and even when that date comes, Social Security has a sizable trust fund to keep it afloat. The government may not be able to raid it anymore, but it will stay solvent. Surely, a modest bump in Social Security's payroll ceiling could fund this expansion option. I'd at least like to see the government to look at this as an option and run the numbers, especially when the economy's actually getting more bleak.


Bruce Krasting said...

You are wrong with your dates. 2037 is the date that SS will be exhausted. Not the date that it will begin its decline. The Trust Fund says that date is 2016. Six years from today and 21 years earlier than you state. Take it step further and check with the CBO. Their report on SS shows that the tipping point for SS is actually 2010.

libhom said...

Bruce: You are the one who is wrong with the stats.

General Comment: The deficits, if that important, could be dealt with by other means, including ending the Iraq and Afghanistan wars and making the rich pay their fair share in taxes.

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