The editors say: "There are no pain-free approaches. But changing demographics mean that the longer Congress waits, the more difficult it will be to deal with the problem." I don't agree with everything they say, but it's a good article.
Monday, August 16, 2010
The LA Times on Social Security reform
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Yet historically untrue.
You can pick your own end points but the logical end result of a crisis gone unaddressed should be a bigger fix going forward, particularly when the range of solutions all would have greater revenues collected/retained over the period of time involved. But in point of fact in none of the thirteen years of inactivity since the 1997 SS Report has the degree of difficulty of the fix actually gone up compared to 97 either when expressed in terms of Trust Fund Depletion, which has ranged from 2029 to 2042 and now back to 2037 or in 75 year payroll gap from 2.23% to 1.86% and now at 1.92%. Indeed it is difficult to see a logical reason to move on this until the cost of the fix gets back to 1997 levels, if it ever does, because what I call the 'Cost of Inactivity' has been negative (i.e. dollars left in pockets) when considered as taxes not collected and future benefits no longer exposed to cuts (say for people who are 55 today and so exempt from most proposals on the table but who were 42 in 1997 and presumedly would have been included).
In any event the argument should be a hell of a lot more nuanced than the same "We can't afford to wait" one we have been hearing each and every year in between, we did wait and on balance did no harm, at least if your goal is to preserve benefits going forward.
Some people have different goals and this delay may have presented some political inconvenience for them, but for those that support FDRs vision the actual results over the last Baker's Dozen of years have been quite satisfying, seems like those guys that called this a "Phony Crisis" in 99 are looking pretty good right now.
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