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January 04, 2005


R C Dean

This would be another one of those "cuts" that is really a reduction in the rate of increase, right?

The kind of cut where you still get more this year than you got last year.


R C Dean, the WaPo article explains the economics of the cut in idiot-proof detail, maybe you should RTFA, before commenting.


Oh, you know the answer, but yes - the absolute value of the payments would rise. One might also argue that, since the COLA arguably oversates "true" inflation, that the real value would rise.

However, it is a cut from currently mandated future projected levels.


TM, the real value may still rise, but the point is that seniors standard of living should be comparable (and increase) with the standard of living of everyone else. Obviously, everyone's standard of living has gone up from 40 years ago, and everyone's will continue to go up into the forseeable future. So this is a CUT cut. Everyone says SS needs to be cut somewhat, I'll wait for other people to present arguments regarding the size of the cut.

It amazes me that conservatives in general, who supposedly care about $$, can't understand any argument more complex than total dollars increasing or decreasing (not directed at anyone personally).


It amazes me that conservatives in general, who supposedly care about $$, can't understand any argument more complex than total dollars increasing or decreasing (not directed at anyone personally).

It amazes me that liberals are unable to be civil or attribute basic intelligence to conservatives for the span of three consecutive sentences.

Oh, since that is directed at you specifically, let me just say so, and avoid inane generalizations.


Tell you what, let's just raise the promised SS to a bazillion dollars a year per senior. Since we can't support what I'll be eligible for in about 10 years, and my children and grandchildren will be handed the bill, an unpayable bill for a bazillion dollars is no worse than an unpayable bill for $50,000. What part of "Ponzi scheme" don't liberals understand?

Of course, we could do other things that might postpone the day of reckoning. We could means test SS, we could increase the age of eligibility (I'd support both, and it would cost me personally money) and we could uncap the tax itself (although I hate the idea). But it would help if Jor and his liberal friends would quit demagoguing the issue.

Robert Crawford

TM, the real value may still rise, but the point is that seniors standard of living should be comparable (and increase) with the standard of living of everyone else.

This is an assumption on your part. I'm not saying that it shouldn't happen, but I do think this should be part of the debate. To simply assume it -- and the validity of COLA calculations -- seems to me to be begging the question.

And, please, YOU go first with your ideas for how much Social Security should be cut.

Mike G in San Diego

Hey, as long as we're talking about secret plans here ...

When is John Kerry going to tell us his secret plan for Iraq?


we conservatives are more numerate than you while also being more honest, more linguistically truthful, and plainer spoken, thus being more accesible to the entire populace.

while you obviously do argue that a cut in the rate of increase of future benefits is a "cut in benefits" that is not the normal connotation amongst the general public. hence the power of decrying a "cut" in benefits. when you make it clear to people that you are simply cutting the rate of increase, and that grandma isn't going to sleep in the streets, then the argument against the proposal loses its lustre.

also, you are making insanely large assumptions. why should the benefits provide an ever increasing standard of living? the people who are benefitting did not earn that standard of living, they supposedly earned the standard of living they had at retirement (supposedly as this is just a ponzi scheme, and not a real investment, so there is no there there and is just welfare for old people) not the one built and earned by their children/grandchildren...

really.. we should just cancel ss for everyone under 45, increase ss eligibility to 75 (or maybe 80) for everyone not yet retired (maybe pro rated) and means test the hell out of it (no welfare for people that don't need it)

i don't understand, ideologically, why leftists and liberals want to give welfare to the rich and the upper middle class (pragmatically its a good idea, but it violates fairness, which is supposedly all)


Robert, its not my idea, its the way SS has been running for the past few decades. It's not "unfair", becacuse every generation pays for the prior generation's retirement. So you're not going to get "screwed".

You would think with increasing job liquidity, a globalized market place, and more and more companies pushing risk on to consumers and employees -- it'd be nice to have a big guy take care of risk just once. Maybe thats why its an Insurance program. It's setting the floor for retirement. You know, so old people can have some dignity.

For those of you lamenting about my communistic, redistributionist ways -- I'd take you all a little more seriously if you stopped stealing my blue-state tax dollars to pay for your red-state corporate farming welfare queens. How about we take care of that first, before we worry about evil old people and their retirement fund. Or maybe, we stop sending millions of dollars to Wyoming for anti-terrorist funds, and send some of that money to NYC instead? (although, I think after 3 years, they finally got around to fixing that).

Ryan Waxx

Saying SS is "an Insurance program" is incomprably stupid. There are so many vital differences, its hard to know where to begin. Lets start with your own issue, the 'standard of living'.

If your house burns down 30 years after the policy is signed, insurance doesn't pay for a nicer house in a better neighborhood based on the idea that your standard of living should rise along with the rest of the country.

If it did, that spendthrift company would go out of business. How nice for you that governments don't go out of business just because fools won't steel themselves to understand basic economic realities.



Just to straighten out your blue state delusions, you just keep slapping corporations around and the last two, if there are any left will leave NY for a nice, boring red state that loves to have them. Not that any leftist work in manufacturing since WWII. Furthermore, red states youth will continue to disproportionably continue to fight for your liberal limp wrist butt, as they have since the sixties, just as the red states have always welcome and kept their military bases, patriotism and serving ones county as a requirement of manhood and citizenship. Lastly, answer me as to why young, the old, manufacturing and those desiring more personal liberty leave red states for blue states? Must be that price of corn, eh?

Paul from Massachusetts( A Century of Socialist Engineering, Bringing You Ted Kennedy, Barney Frank, Gerry Studds, Mike Dukakis and John “F’n” Kerry! )

Krusty Krab

For reference, on November 13, Matthew Yglesias railed at Bush for not considering changing from wage indexing to price indexing. I saw no outrage whatsoever in Matthew's comment section over this suggestion. Now this is part of a Bush proposal, naturally I expect a storm of anger over it from the "reality based community".

It is clear to me now that the 45% Kerry was talking about is the same 45% coming from price indexing. Thus, Bush was (apparently) considering this all along. Yglesias generally makes little effort in his "reality based" posts to be even handed, so it will be interesting to see how he responds to Bush "adopting" his idea.


Jor - you say it should increase with standard of living, and then you say it's insurance.

If it's insurance, what is it insuring against? What is being insured? I would assume it's insuring that we'll be able to eat and not live on the street after we retire.

If that's the case, the benefits should be linked to the cost of property tax or rent plus food. In other words, prices, right, not standard of living? I'm not saying Seniors shouldn't get more than that, just that they have to invest and save for themselves to get it - we'll only insure them against being destitute...

If that's not what we're insuring against, what are we doing?


Also - if it's insurance, why are we paying it out to people who's house haven't burned down?


I would challenge all of you conservatives who enter this debate with redistributionists to parse their words and measure them against what their stated goals are. As the debate is joined on an issue I have been flogging for years, a thing that occurs to me is that the Left needs this program to fail so that they may institute means testing for eligibility.

That means if you have any pension plan, 401K or personal savings you will be screwed out of the system. This is a good thing for the Left, who are rapidly losing issues to divide us with. They need a failing SS system to consolidate their coalition of the downtrodden, the slothful and the aggrieved.


Jor: A year-over-year increase is still an increase. Slowing the rate of growth is not the same thing as cutting benefits, that's really quite simple to understand.

It should also be noted that the CPI tends to overstate inflation in a very severe way, someplace in the neighborhood of 50 basis points and I've seen estimates as high as by 200 basis points. Most informative on this matter is probably Steve Verdon, and of course the guys over at Marginal Revolution


Heh - So basically what you are saying is confiscate from the wealthy to pay for the poor? Sounds like socialism to me. If you pay the payroll tax, you should get your benefit regardless of means. Social Security is not welfare, and it should not be a redistribution mechanism. However, I do agree with your sentiments as far as eliminating the portion of Social Security that is not for retirees (or as you suggest under 45) and possibly increasing the retirement age. After all, as people live longer the age should increase incrementally much like the COLA adjustments. It should just be automatic, say every five years you adjust retirement age up 1yr. This is fair as it would affect all the participants equally. But, how people can argue for means testing without basically stealing wealthier persons contributions (these are your contributions, not the governments, remember) to pay for poorer persons, doesn't make sense to me.


I am trying to figure out what is wrong with Social Security. I mean of all of the government programs, it is not something for nothing. Yes, it is a transfer payment, taxing one generation to pay benefits to another generation, but the generation getting benefits had to pay forward to their generation of seniors by getting taxed on their wages, and if you didn't work and pay the tax you don't get benefits (some exceptions for disability and other social insurance aspects of Social Security).

What could be possibly wrong with any of that? For starters, many of the comments made on the President's proposals are a big symptom of what is wrong. This generation, my generation, is having many fewer children to do the paying forward to my generation as seniors. Traditionally, children supported seniors and Social Security is a socialization of that responsibility -- I don't have to have kids to be secure in my old age, you don't have to have kids, but someone out there has to have kids.

If there are fewer kids, something has to give -- as seniors we have to get less benefits, our kids will have to pay higher tax rates or our kids will have to make a whole lot more money. Slimming down the benefits of my generation is a reasonable part of the equation, but Social Security gets demagogued and its stupid and counterproductive to do so, but people do it anyway.


When exactly did SS get indexed to wage growth rather than CPI? I suspect it was not decades ago as Jor states, since I remember a hullabaloo when the CPI wasn't going to rise fast enough for the seniors to get an increase one year around 1989.


Just Facts: Social Security

* The Social Security Act of 1935 set the wage threshold at $3,000. Income earned above this amount was not subject to Social Security taxes. This threshold was a fixed amount that was not indexed for inflation. [12]

* Between 1950 and 1971, various Congresses and Presidents passed at least 6 laws to increase the threshold. [13]

* In 1972, the Congress and President Nixon passed a law to automatically index the threshold based upon the national average wage. [14]

* In 1977, the Congress and President Carter passed a law that increased the threshold in 1979, 1980, and 1981 at higher rates than the growth in the national average wage. [15] [16]

* Since 1982, threshold increases have been based upon growth in the national average wage. [17] [18]

* In 1951, the wage threshold was 129% of the national average wage. In 1998, the threshold was 237% of the national average wage. [19]


SSA: National Average Wage Index


Federal Register: April 15, 2004

The primary insurance amount is the basic figure we use to find the monthly Social Security benefit amount we pay to workers and their
family members. Under section 215(i) of the Act, primary insurance amounts are automatically increased each year if there has been an increase in the CPI or AWI over the specified measuring period. Under the law in effect prior to the enactment of Public Law 99-509 on
October 21, 1986, we could increase primary insurance amounts only if either the CPI or AWI rose by 3.0 percent or more over the specified measuring period. Section 9001 of Public Law 99-509 removed the 3-
percent restriction from the law. However, we have not previously revised our regulations to reflect this legislative change. This revision conforms our rules on cost-of-living increases to current law. This rule also provides clarification on how we round increases in the
CPI or AWI to the nearest tenth when the calculated increase is exactly halfway between tenths of one percent.



It was not until June 1975 that the automatic adjustment provisions of 1972, as amended in 1973, were allowed to generate their first increase-a benefit rise of 8%. By then it was clear that the program had a long-term deficit due in part to the interplay between the automatic adjustment provisions and revised economic projections.(102) Social Security's automatically adjusting benefit formula thus posed a serious thread to actuarial soundness. The formula was drawn into a growing Social Security debate energized by an ever-increasing projected actuarial deficit.(103) Benefit formula revision was pushed into the policy arena not because it could offer more equitable treatment of groups with differing wage histories and dates of retirement-though it could-but because without dramatic change on the benefit side, a major long-term deficit loomed. Interest in that long-term deficit was fueled by serious short-term financial problems.(104)

Brad DeLong

It's brave of you to fight for Kurtz's job, but let's give Kurtz the mike:

"...exaggerations and distortions... [by] Sen. John F. Kerry.... I wrote: 'But the president, while favoring allowing younger workers to put part of their benefits in private accounts, has never put forth a plan -- and has vowed that any change would not affect current retirees.'

"Now that did not mean Bush didn't have a secret plan, or that he wouldn't decide to cut benefits after the election. But the Kerry camp didn't have any evidence that the administration had a confidential 'plan,' just a mathematical argument that it was likely..."

That is: Kurtz says that Kerry's "exaggeration and distortion" was to say something that was true, but that Kurtz does not believe that Kerry knew was true.

As far as defending Kurtz is concerned, it's past time for you to surrender. I'll let your officers keep their horses for the spring plowing...


I don't particularly trust Kurtz to defend himself on this one, since he is likely to get muddled. My point, which differs from Kurtz's somewhat, is that Kerry seemed to suggest that Bush would cut benefits for current retirees. The ad does differ from the press release, but are we really arguing about whether Kerry made these statements in Florida with the intention of scaring current seniors?

That said, I do need to keep my horse, not so much for the plowing, but for the use I get from its other output.


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