What Will the AARP Have to Say?
David Brooks’ suggests that senior citizens organize to advocate changes to their government-provided benefits; specifically, changes that would take from them and give back to younger generations.
With that suggestion, Brooks probably will not win many friends among the senior set — especially not with a headline that labels them “geezers” — but the idea is nonethelss provocative and something like it might eventually prove necessary, given our stubborn deficit conundrum.
Not so fast, responds Dean Baker.
… if David Brooks and other so-called educated people want to ignore these taxes [that benefit seniors], then we should also talk about the money the government pays out to the super-rich, like investment banker and big-time Social Security foe Peter Peterson, as opposed to poor children.
Peterson has well over $1 billion in wealth. Let’s suppose that he has 10 percent or $100 million in government bonds. This means that he would be getting around $3.5 million in interest checks each year from the government. By comparison, the total payments — SCHIP, food stamps, EITC — going to support a poor kid would probably not even sum to $10,000. This means that the taxpayers are giving Peter Peterson $350 for every dollar that we give to poor kids. Isn’t that an outrage?
15 Responses to “What Will the AARP Have to Say?”
Why not look at innovative programs such as Supportive Living in Illinois rather than give backs.
Is Brooks going to stop coming across like a DC-culture, or Northeastern corridor elitist? [sigh]
The noteworthy thing about the AARP itself is the question of to what extent it represents “retirees” or older people, as well as its political history when it comes to Medicare, Social Security, and related issues. (In this sense it's somewhere between the American Medical Association and labor unions.)
As far as “Peterson” — if it's Pete Peterson, well, he has, if I recall, already written more than once not only about the fiscal future of the nation but about the need for a means test.
A means test, excluding those who can afford to pay most or all of their expenses, who don't need retirement-related benefits as much as others, is the conventional solution most people are looking at for the future. I've provided an alternative example in the case of Social Security, reducing the benefit payments to the same minimum payment for all, to reduce the costs of the program, as an alternative to the means test. Liberal activists are heavily in favor of, and heavily defend, universality as the way to assure continued support of these programs, and they ought to look at benefit reductions that enable us to retain universality. It's not too early to be looking at the various solution strategies for these programs.
I've got a news flash for Brooks. Obamacare will eliminate Medicare.
Don't believe me? Then ask the old folks and they will tell you all about it. They know it is true because they get weekly letters from the RNC telling them that, they get letters from organizations with the name like “Help Save Medicare, Inc.” and they watch Fox News.
So I don't think the old folks will be in much of a mood to give up anything else.
Whatever is given up or kept, etc. it will need to be based on something equitable and rational. Those folks who have worked all thier lives and whose main source of retirement income is social security obviously won't be in any mood to give up what little they need to survive. Those for whom social security is only frosting on their retirement cake, then there is room to adjust. And many people can continue working – assuming their are jobs for them. In any case, Dean Bakers comments are sensible ones.
“I've got a news flash for Brooks. Obamacare will eliminate Medicare.”
It won't happen. Neither Social Security nor Medicare face an existential threat currently. (The slump in the economy awakened many people.) Both programs are unsustainable but will never vanish completely.
Brooks and the New York Times are once again years late to discover (and they earn no credit now for “discovering”) what has been obvious for years, and even discussed for years. This is not only true for our population aging and entitlements (Pete Peterson has authored more than one book in past multiple decades about this subject, and federal finances in general! I've read and owned a number of them) but for Europe, which has more lavish retirement programs, a far higher dependence on government for retirement financing (rather than private savings and investment, as in the USA), a worse future aging problem (some of which it has been already facing for several years now — where, again, have Brooks and the Times been? Does something only become important when these tardy and grossly overrated sources Discover it, and deign it important to say something about it?), which already has the authorities in Europe concerned.
The three of Peterson's books I have owned and read are these, which discuss the entitlement problem.
http://www.amazon.com/Gray-Dawn-Coming-Transfor…
http://www.amazon.com/Facing-Up-Paying-Nations-…
http://www.amazon.com/Will-America-Grow-Before-…
The Global Aging Initiative at CSIS is several years old. A number of years ago it released a report on the state of a number of OECD (modern, developed) nations, and the problems they can expect as the population in these countries ages. I've posted links to this and related works below numerous times.
(CSIS Aging Vulnerability Index, 2003; Global Aging and the Sustainability of Public Pension Systems, 2007)
http://csis.org/program/global-aging-vulnerabil…
The graying of the West and what it means politically, militarily
http://csis.org/program/demographics-and-geopol…
The End of the Post-War Welfare State (link posted here numerous times)
http://www.twq.com/02spring/hewitt.pdf
Population aging — comparison among various developed nations
content.healthaffairs.org/cgi/reprint/19/3/191.pdf
Replacement migration as a possible solution to aging
http://www.un.org/esa/population/publications/R…
Future of pensions, health care in Europe
ec.europa.eu/public_opinion/archives/ebs/ebs_161_pensions.pdf
ec.europa.eu/health/ph_overview/…/strategy_discussion_en.pdf
Welcome late, very late, to your important “discovery,” Brooks and the Times.
More information about Europe can be found here:
http://www.europarl.europa.eu/activities/committees/st...
Brooks brings a very old argument that's been around whipped on by various 'young' (over 30 geezers) activists for the last 20 years. Brokaw's Greatest Generation is currently the 'oldest generation.' They should give more?
“They should give more?”
No. There is no need to overrely on the “greedy geezer” theme (and related “gray panther” stuff) that we, yes, have been exposed to for 20 years if not for longer. (Some of Peterson's books, which include graphs showing elderly figures stooped with canes, and small children holding a toy ball, to show the comparison of what's done for the elderly versus the very young, are books written long ago.)
The primary retirement program reform is to revisit the retirement age, which remains too low. It should be in the early seventies now. An intelligent policy would recognize some ability to retire early and could even be more flexible than what we have now, while integrating it with other things like the rules for 401(k) retirement fund distributions. Which is to say, offer retirement and adjusted benefits (greatly reduced the earlier one retires from the standard age) with an initial retirement age range of ages 59 and a half (perhaps at 50% the level of waiting until full retirement age) to 70 and a half (full retirement age, currently).
Social Security benefits could be reduced someday, ironically when (as I've said before) many not thinking about this now will desire or demand higher benefits in the future, when they have retired and may not have any other income. (Many will want to keep working, but will face age discrimination.)
Obamacare will eliminate Medicare.
That has been the RNC talking points for a while now. The RNC doesn't want to get rid of the Medicare Advantage Program, which has been a disaster for the budget and a boon for their lobbyists, all while not providing much benefit at all for seniors.
The problem is that the retirement age is WAY too low.
“The problem is that the retirement age is WAY too low.”
It should be into the seventies now, and this should have been done several years ago. Even the age at the top of the range for 401(k) withdrawal rules, 70.5 years, is too low, in reality. (Something like 73 is more like it for both this top age and the Social Security and Medicare retirement age.)
For years remedies such as indexing the retirement age (and benefits, too) to changes in expected lifespan have been suggested.
They remain controversial because of an unrealistic expectation of many, a relic from the 1960s-70s (and even then, unrealistic) of an ever-decreasing retirement age and longer retirement. It's similar to the mentality (based on outmoded and incorrect views of the real world) expressed by the tradition in the old manual trades, most notoriously in the automobile assembly plants, of “Thirty years and out,” working for only thirty years and then retiring with a full pension. People retiring before fifty has been an unworldly concept (except to legacy industries and government, where unions were or still are in a strong position), and retiring before fifty and living until just before, or after, ninety at taxpayer expense is unaffordable.
Age Dependency Ratios and Social Security Solvency
aging.senate.gov/crs/ss4.pdf
“The era of earlier and earlier retirement has come to an end.”
http://fmwww.bc.edu/EC-P/WP424.pdf
“The trend toward earlier and earlier retirement was one of the most important labor market developments of the twentieth century. It was evident in all the major industrialized countries. In the United States, however, the trend toward earlier retirement came to at least a temporary halt in the mid-1980s. …
If opinion polls are to be believed, most workers favor preserving the institutions that allow early retirement even if it means these institutions will require heavier contributions from active workers.”
http://fmwww.bc.edu/EC-P/WP436.pdf
Recent information on retirement trends can be found here.
http://opencrs.com/document/RL30629/2009-09-16/
Political Future of Pensions in Aging Societies
siteresources.worldbank.org/…/Pensions_in_Aging_Societies_Galasso.pdf
The funny thing is, I've talked to a few politically active elderly who are willing to accept reductions if it was part of the government becoming more responsible. Quite of few of them are aware that they're getting more out of Social Security and Medicare than they put in. It's by no means universal, but to assume that all of them would weigh in against reform is a bit presumptuous.
The ones you talk to must be sharper than the ones I talk to.
The ones I talk to are rather well off and into their 80's. They pay taxes on their Social Security income (something they thought would never happen to them.), so they are suspicious.
They are certain that ALL of Medicare is on the verge of being wiped out. They know this because Fox and the RNC and the various Committees “To Save Maedicare” tell them this.
If you were not getting SOME of your news from the “leftist propaganda machine” and your favorite website was Drudge and read the literature that is regularly sent to them by the RNC and various “committees” you would be hard pressed to disagree with them.
There is a whole cottage industry now that pays people handsomely to scare the HELL out of old people. NONE of them come right out and say what they mean, but they all ask for money.
I'm sure that some of the difference comes from the regions we live in. Although some of the ones that I've talked to are relatives that live around the DC region.
I've seen some of that. Obviously the official Republican line is that they're going to save Social Security and Medicare. I also once read a blurb in the AARP's magazine that described Social Security as a retirement plan that invested money in government bonds “just like you would”. There's plenty of BS being thrown around on all sides.
Isn't there a bit of a disconnect suggesting expanding the ranks of working “geezers” while we have an unemployment crisis? Indeed, I've seen proposals encouraging early retirement to help unemployed young people with families to support.
Meanwhile, there's plenty of money that could be shaved off of massive corporate welfare and the bloated military. as well as the overly coddled and rewarded super rich. “Geezers” are an easier target than the military, prison or medical cabals, but the money we pissed away in Iraq alone would keep Social Security afloat for a long long time.
I doubt it. The assumption here is that there's a fixed number of jobs out there that anyone can do. My guess is that the unemployment really stems more from a lack of people needed for the jobs that need to be done, and a disproportionate amount being paid to some people reducing the buying power of the rest of the working class, which reduces the number of people than can be employed.