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The online magazine “Life As A Human” just published a great article about the difficult financial condition of United States Social Security system. The article, titled “Raising the Retirement Age in America is Robbing Peter to Pay Paul” is a concise and insightful summary of the problems and false assumptions associated with the theory that raising the minimum Social Security retirement age is a fair and reasonable solution for reducing the government’s budget deficit.
The article, which is subtitled, ” Abandoning the elderly is no way to balance a budget“, starts off by saying,
“Proposals to raise the minimum age for collecting both minimum and full Social Security benefits in are gaining increasing traction across the political spectrum. This looks like a comparatively painless way to address an intractable underlying problem: a large birth cohort entering retirement in the middle of a recession, which pushed forward by many years the date at which benefits exceeded payroll taxes. The Federal Government raised payroll taxes and supposedly stockpiled a surplus during the 1990s in anticipation of just such a crunch, but unfortunately they loaned the surplus to themselves, spent it on other programs, and are now faced with empty coffers and the prospect of having to borrow money to cover their debt to today’s retirees.”
Later, the article goes on to say,
“Charging the maintenance of [the people who should be able to receive Social Security benefits], who contributed faithfully to the retirement program which is now broke, to Social Security Disability, or extended unemployment, or entitlement programs such as section 8 housing, or heavily subsidized private insurance under “Obamacare” does not save the public any money and multiplies the bureaucratic headaches. The alternative is to tolerate high levels of poverty and unmet healthcare needs among the elderly. “
The article sums up the situation by concluding,
“The people advocating raising the retirement age are making many assumptions, including projecting an economic recovery which so far has failed to materialize. One way or another, the system is going to have to produce a way of distributing intergenerational benefits and obligations in a way that is sustainable and affordable, across the entire spectrum of the American population. Raising the Social Security retirement age and throwing a large number of older people onto social safety net programs that are even more stressed is not the answer.”
Do yourself a favor and read the entire article. It’s very thought-provoking and well worth it.