by Barkley Rosser from Econospeak
“The young will pay more and get less.” More Nonsense from Robert Samuelson
Our old friend, Dean Baker at Beat the Press, does a good job of taking apart yet another screed by the execrable Robert J. Samuelson, faux economist for WaPo, whining about why nobody is jumping on board with cuts to “entitlements,” and particularly his old bugaboo, Social Security. Google “Dean Baker Robert Samuelson is upset” and the first hit gives you the link (Sorry, the link title is too long for me to read it and my trying to put what I saw in just sent one to the general CEPR site, bah! (Anybody out there able to tell me how to overcome this bit when urls are too damned long too read, please?). However, I want to pound the nails in a bit more.
So, RJS provides this line that if there is not an adjustment to SS (and Medicare), then “The young will pay more and get less.” Dean quotes this, but does not go far enough in showing how totally ridiculous this is, even though he has pointed out recently that one reason there should be no adjustments for SS now is that the young are massively misinformed about what the not so bad fiscal situation of SS is. Large proportions of them are fully convinced that they will receive no Social Security when they retire because it will be “bankrupt,” when in fact that condition will amount to them only getting something like 120% of current retirees’ benefits in real terms rather than more like 170% (a bit lower, actually). They are totally out of it, and the main threat to them losing their future benefits is if they support the sort of dreck that RJS is pushing, to cut their future benefits now because otherwise they might have their future benefits cut in the future (eeeeek!).
Let me be more pointed. RJS’s statement is simply a lie. The proposals to cut Social Security have generally taken two forms recently: imposing a chain price index and adding another round of retirement age increases in the future beyond those that were imposed by the Greenspan Commission nearly 30 years ago and which are still coming in. The former is estimated to reduce cost of living increases by about 0.3% per year, and this would over the next few years indeed gradually reduce what elders receive in benefits, although it is not at all clear that this will lead to any reduction in what the young will be paying, unless this is accompanied by another round of fica tax cutting, or fica is restructured to have the same revenues come in but have it paid over all income levels, thereby reducing the burden for anybody under the upper cutoff for paying it. However, the effects of this change in the CPI used means that the cuts will get bigger and bigger as time passes, meaning that those who will be most negatively impacted will not the evil baby boomers, but the current young when they finally retire, although since they think they will get nothing, presumably they will be grateful to get even a crust of dry bread.
More egregious for RJS’s arguments, and where he really is just outright lying rather than merely stretching the truth is this matter of increasing the retirement age. Nobody is talking about any further rounds of that happening anytime soon. RJS poses as this defender of youth against his awful generation (he trumpets his baby boomerdom to supposedly give credibility to his regularly repeated nonsense), but in fact the baby boomers, or certainly at least the front end ones like me and him, will not be affected at all by these future increases in eligibility ages. It will be the Gen Xers and the Millennials. RJS is just lying through his teeth. We old farts will not pay at all as a result of this change, but today’s youth will.
reposted from Econospeak