STUMP » Articles » Mornings with Meep: A Modest Proposal for Social Security

Mornings with Meep: A Modest Proposal for Social Security

by meep

6 May 2018, 10:47

Here’s the video:

If you can’t see that, go here for a direct link.

It’s a bit chilly & overcast here today. Just felt like some milk.

SOCIAL SECURITY MATERIAL

Dawn Smit: Social Security: How many people were expected to receive benefits?

Though the life expectancy at birth in 1930 was only 58/62 (the chart I’m looking at says 59/63 for 1929-1931, FYI, not much different), that included a high infant mortality rate. Looking at age 20 (entering the workforce), the life expectancy was another roughly 47 years (age 67/68). So Social Security was designed in 1935 with the intent that it would only kick in at end of life. Which fits the goal of Social Security: protect the most vulnerable elderly. (The modern idea of retiring before you had to physically stop working was only gradually percolating through the country at the time.)

However, the most relevant life expectancy number for the Social Security Board was at 65, which was roughly another 13 years (age 77/78). Among these, the ones who were starting to outlive their cohort, were the vulnerable elderly, and the older they got, the more vulnerable they became.

FWIW, I happen to think that Social Security will slowly morph into an explicit protection for vulnerable elderly — an actual safety net against elderly poverty, as opposed to the “I’ve earned it” aspect now.

Speaking of “I earned it” – Here’s Elizabeth Bauer:

The Social Security Trust Fund Is Real – But So What?

Consider this alternative: what if, in the 1983 Social Security reform, rather than building up surpluses, Congress had decided that any surpluses would be become general tax revenues and any deficits would be paid directly through tax revenue? Functionally, there would have been little difference, other than bookkeeping, between building up a fund, nominally, that is immediately funneled into government spending, and doing so directly, and between bonds being redeemed, in the future, requiring new borrowing to fund the redemptions (or running a budgetary surplus — in some alternate universe, anyway), or just borrowing directly.

Alternately, what if Congress had simply decided that FICA taxes would vary each year, determined by the projected Social Security payouts each year? We would not be discussing the depletion of a fund, but instead, perhaps, would be complaining at the prospect of our FICA taxes growing ever higher.
…..
The bottom line is that whether the Trust Fund is “real” or just a fiction on paper, in the end, doesn’t matter. Whether the Trust Fund uses its assets to pay retirees, and the federal government has to borrow, to pay back that debt, or whether the government has to pay those benefits directly, it’s still the case that money has to be found — and the amount of money which will have to be found, for retirement benefits, Medicare, and other expenses, is forecast to grow dramatically. A January paper from the Brookings Institute provides some very sobering numbers: due to the aging of the American population, federal spending on the elderly is forecast to grow from the current (2017) level of 20.5% of GDP, up to 29.4% in 2046 — and that’s not 29.4% of government spending, but 29.4% of our total economic output. And this isn’t just a temporary “hump” due to the Baby Boom.

You should read the whole thing (remember, there are two pages.)

As for the mortality bump at age 62, here ya go:

WSJ: Why So Many Men Die at 62

If you’re approaching age 62, thoughts about retirement and collecting Social Security may be on your mind. Here’s something else to think about as well.

A significant increase in mortality starts at 62, according to a new study. The escalation is much more dramatic for men than for women. And the fatal catalyst, the study’s authors believe, might be the availability of Social Security.

Sorry, I don’t have the full article – I’m not a subscriber (right now).

LAST WEEK’S POSTS

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Thanks for reading!

SOME MUSIC FOR A RAINY DAY

Have some:

STUMP » Articles » Mornings with Meep: A Modest Proposal for Social Security » 6 May 2018, 10:47

Mornings with Meep: A Modest Proposal for Social Security