tag:blogger.com,1999:blog-7334408760351487944.post5880801677893353402..comments2023-11-12T06:43:00.060-05:00Comments on Notes on Social Security Reform: New paper: Social Security Cost-of-Living Adjustments and the Consumer Price IndexAndrew G. Biggshttp://www.blogger.com/profile/16617460431856611873noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7334408760351487944.post-61408327777342295042008-05-23T16:05:00.000-04:002008-05-23T16:05:00.000-04:00It's not clear to me what the best rate of increas...It's not clear to me what the best rate of increase in benefits is; in this case, though, if the target is inflation then we'd want the best measure of it we can get.<BR/><BR/>I'm interested in the idea of increasing benefits at the rate of wage growth (around 1% higher than inflation each year), coupled with a reduction in initial benefits to keep lifetime benefits constant. The larger COLA would raise benefits late in life, when they're needed, and the lower initial benefit would encourage people to work longer. You'd have to tweak things to keep progressivity the same, but that's not hard to do. Plus, this would make the system's finances more or less invariant with regard to changes in wage growth, which would reduce uncertainty.Andrew G. Biggshttps://www.blogger.com/profile/16617460431856611873noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-36912505663947301872008-05-23T14:55:00.000-04:002008-05-23T14:55:00.000-04:00Well you would know better than me but I suspect t...Well you would know better than me but I suspect this kind of change would require legislation in that it directly changes the explicit financial obligation of the government, as opposed to say a change in assumed interest.<BR/><BR/>But I wanted to make a different point. The article implicitly assumes that having retirees get a better purchasing power over time is a bad thing. Why this should be so is unstated but is bound up with the overall 'crisis' narrative. Absent that why would we really care? Plus I have to wonder if that CPI-E fully compensates for the regular increases in the Medicare premium. Most of my mom's most recent COLA was gobbled up before she saw it.<BR/><BR/>In any event this niggardly 'God forbid gramma can buy some extra presents for the grandkids' narrative is a little off putting.Bruce Webbhttps://www.blogger.com/profile/13222670342780912788noreply@blogger.com