The University of Chicago Business School’s regular survey of prominent economists touched on whether retirement ages for national pension systems (in Europe, though we can infer that this group would apply the same logic to the U.S.) should increase to account for rising longevity.
Of the group, 77% favored increasing the retirement age; 2% were opposed; and 12 percent were unsure. Read more here.
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Raising the retirement age in relation to the increase in a cohort's increased life expectancy would be prudent. However, it was not part of 1935 Social Security act nor was it added until 1983 when Social Security was nearly a mature program.
The increase in retirement age should be based on balancing the cash flow costs of Social Security. In this I mean since the short fall is ~23 to 25% in 2034, should not attempt to eliminate the shortfall by increasing the retirement age.
The 1983 increase from age 65 to 67 affected those who were born 1938 and after. Not only did this age group pay the highest payroll tax, but they were also affected by the highest base and payroll tax of any generation. Millennials will after a few more years surpass the boomers with the highest lifetime payroll tax. The actuarial cost for a one year increase in the retirement age requires 2.5 years of additional benefits to be paid. This accounts for the time value of the sum total of payroll taxes being delayed by one more year plus the additional payroll taxes for one more year. The increase in the retirement age from 65 to 667 more than offset the increase in life expectancy on an actuarial basis.
However, since politicians do not understand basic math, use linear approximations to exponential growth rates, I must assume those who support increasing the retirement age even further are attempting to keep the number of paid years equal and the number of working years unequal.
The problem with any ponzi scheme is the money is gone and there is no way to make everyone whole. To perpetuate the ponzi scheme in the hope of not facing the ultimate failure of Social Security is just cruel, selfish and in humane.
When a person says “We Earned it!” what exactly do they mean?
To me, this phrase is a righteous euphemism for making the more truthful statement: "We were snookered by this Social Security Ponzi scheme, and now we are going to snooker the next generation!"
If Social Security benefits have been "earned" who is obligated to pay benefits to those who "earned" them? Workers? On a regressive tax basis? Why? Why perpetuate a fraud upon the innocent? Who is responsible for bearing the burden of a fraud? The person defrauded? Or an innocent or unborn child?
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