Robert Proctor's List: Social Security

• The bipartisan Social Security Administration projects Social Security outlays to rise only from around 5 percent of G.D.P. today to around 6 percent of G.D.P. in the mid-2030s and then eventually to fall below 6 percent of G.D.P.

    

  A modest increase in payroll taxes and a slight rise in the incomes covered by those taxes will largely take care of any future shortfall.

    

   
  Such a one-percentage-point gap can be easily closed by modest increases in taxes, without resorting to any cuts in benefits. For example, a two-percentage-point increase in payroll taxes would entirely close the expected funding gap
• As an alternative, we could raise the maximum wages on which payroll taxes are paid to 90 percent, which is where it was in the early 1980s, from the current 83 percent. This would close more than a third of the gap. The remainder of the gap could then be closed by raising the payroll tax by only a bit more than 1 percent. There are many other options, none of them oppressive.
• Almost completely lost in the lop-sided public discourse is that Social Security is already far from generous. The average benefit is $1,400 a month. Almost two-thirds of the elderly receive more than half of their annual income from the program, and more than one-fifth receive all of their income from Social Security.
• To put it in stark perspective, Social Security payments as a percent of average wages in America are about 16th among public retirement programs of 18 rich nations. Meantime, the private retirement system is increasingly inadequate. For pension income, America ranks 17th.

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• the most important and widely ignored fact about the budget situation is that we have large deficits today because the collapse of the housing bubble sank the economy. This is not a debatable point.
• The automatic and deliberate steps taken to counter the downturn fully explain the large deficits we have seen the last five years.

• One of the things the richest society the world has ever known can buy is a decent retirement for people who don’t have jobs they love and who don’t want to work forever.
• since 1977, the life expectancy of male workers retiring at age 65 has risen six years in the top half of the income distribution. But if you’re in the bottom half of the income distribution? Then you’ve only gained 1.3 years.

• You know what age most people actually begin taking Social Security? Sixty-five is what most people think. That’s the law’s standard retirement age. But that’s wrong. Most people begin taking Social Security benefits at 62, which is as early as the law allows you to take them.

   

  When they do that, it means they get smaller benefits over their lifetime. We penalize for taking it early. But they do it anyway. They do it because they don’t want to spend their whole lives at that job. Unlike many folks in finance or in the U.S. Senate or writing for the nation’s op-ed pages, they don’t want to work till they drop.
• But he and all these folks who like to talk about raising the Social Security retirement age as if it’s a no-brainer need to think harder about why they’ve settled on the cut to Social Security that will concentrate its pain on people who haven’t fully shared in the remarkable increase in life expectancy, who don’t make much money and who don’t love going to their jobs every day. 

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