Tuesday, August 28, 2007

One candidate speaks on Social Security

Every blog needs a niche and I suppose my place will be to track how the Presidential candidates address the simmering Social Security crisis. Here's a Q&A for Rudy Giuliani (hat tip to RCP) who answered - or failed to answer - the question:

What's your plan to deal with Social Security?
I'm going to say, and I mean this, Social Security is something we can straighten out if I get elected. I believe Social Security will be straightened out if almost anybody else gets elected. I don't think this is one of the critical things that only I can do, because I think Republicans and Democrats are willing to agree on Social Security once they get themselves out of a presidential race where Democrats are hoping to hear one of us say that we're going to reduce Social Security so they can do commercials saying we are going to hurt elderly people. And Republicans may be hoping the Democrats are going to say something where they can say they're going to bankrupt the country. And the reality is that neither one of us is going to do that. There are several solutions to Social Security that could get bipartisan support, but if either side comes out supporting it, it's going to get wiped out in all the political finger-pointing that's going on. There is too much history here. It should be done. Someone should get elected and put together five Democratic and five Republican senators and tell them, "Give me two options, three options, and then we'll negotiate it out."
Another commission, oh boy. Of course, everything Giuliani says is exactly correct which is why there is never any progress in unearthing a solution to the entitlement puzzle. But if I could ask one question of all the 2008 candidates, it would be this:

Without saying what you wouldn't do, what actionable steps would you take to reform Social Security?
As a minimum, will the candidates acknowledge that a program crafted in the shadow of the great Depression may be an anachronism in a country where over half of Americans own stock either directly or through 401(k)s?

Hey, I'll go first: the Social Security benefit age should be raised to 70.

Social Security's original retirement age of 65 was set in 1935 when life expectancy was 63. Today, life expectancy is 77 - and, for those who live to 65, life expectancy is 83.
With an aging population, the number of workers supporting each retiree has dropped from 16 workers/retiree to 3 workers/retiree today. Somebody's gotta pay and by 2030, it's just going to be me and you.

8 comments:

Bram said...

"I think Republicans and Democrats are willing to agree on Social Security once they get themselves out of a presidential race..."

Like the way they all agreed not to fix it in the Spring of '05. They couldn't run away from Bush's modest proposals fast enough.

Anonymous said...

My grandmother was left well off by my grandfather. (20k a month tax free forever) She's in her late 80's. But suggest a means test for SS and her and her similarly well-off blue haired friends will scream like you are skinning them alive.

I know President Roooosevelt promised you your social security. I know you paid in all your lives. You also benefited from the greatest economic expansion in the history of mankind. Something's got to give.

Vermont Woodchuck said...

I voted for Goldwater in 1964 because he wanted to make SS disappear. Didn't happen, so the government kept taking my money and squandering it.
Now I want what was stolen from me. If it bankrupts the system, good. That will kill off this Ponzi scheme once and for all time.

Let the pols fear the angry mob.

Anonymous said...

When one political party knows the train wreck is 25 years away and the other knows they can win elections today by claiming that they've saved Social Security from immediate destruction, nothing is going to happen until we get much, much closer to the explosion.

Gary said...

The problem goes far beyond social security and the worker:retiree ratio. It's entitlements in general, and non producers being supported by producers that's the larger issue.

Our kids and their kids are going to figure this out over the next 30 or so years and the result isn't going to be pretty.

Teri said...

I always love when folks say you should raise the retirement age because people are living longer. It's not about how long you live. It's about finding a job that will let you WORK until 70. I'm 56 and I'm already stuck in low paying tech jobs because of my age. How the hell am I supposed to keep working if no one will hire me because of my age?

And FYI, you may find as you age that your energy level is not exactly what it was in your 30s. I would find it hard to pull those 10 hour days with lots of overtime that were easier when I was younger.

Eric said...

Excellent point, Teri.

Social Security was started at a time in American history when most jobs were brutish, physical, and long. One virtue of the program was that people in their sixties couldn't work coal mines anymore and they deserved a break.

But now senior citizens are much healthier and can earn an income in a low-impact job such as working a computer or walking around Home Depot. This is not the 1930s anymore.

Dave said...

Also, Teri, unless illegal immigration ramps up even more (and includes a lot of people with a lot of skills) we're going to be in a labor shortage situation again soon enough. Check out the balance between those age 21 or under and those aged 65 and above.

I'm 60, can probably work at my current job until I'm 70, and am planning (i.e. acquiring new skills) on what to do after that. Don't let anyone kid you, old dogs can learn new skills, especially if they're motivated.

I intend to work as long as my health allows. Also, if SS goes belly up, I can live without it. Planning counts.