tag:blogger.com,1999:blog-7334408760351487944.post7543253985128644718..comments2023-11-12T06:43:00.060-05:00Comments on Notes on Social Security Reform: What have McCain and Obama both voted for on Social Security?Andrew G. Biggshttp://www.blogger.com/profile/16617460431856611873noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7334408760351487944.post-16715447346680405232008-06-17T15:29:00.000-04:002008-06-17T15:29:00.000-04:00jg seems to have the bases covered.Let me just poi...jg seems to have the bases covered.<BR/><BR/>Let me just point out that (A) is a purely political consideration. It seemed to be the consensus of the Cato convened Conference that followed the 1983 Reform (papers published in the Fall 1983 issue of the Cato Journal under the title <A HREF="http://www.cato.org/pubs/journal/cj3n2/cj3n2.html" REL="nofollow">Social Security: Continuing Crisis or Real Reform</A>) that cutting benefits for current retirees or workers approaching retirement was a recipe for political failure for any reform proposal, a point made specifically in Butler and Germanis. And President Bush was quick to emphasize the same point in Nov. 2004.<BR/><BR/>So (A) is just a hedge against electoral backlash.<BR/><BR/>(B) is rather interesting and reflects a fundamental divide between supporters of traditional Social Security and reformers. As a supporter I am moderately concerned about the impact of future benefit cuts at depletion, but given the numbers not too so, moreover from my perspective any 'reform' that starts from a position of benefit cuts is no 'reform' at all. Whereas reformers seem mostly focused on Social Security as a cost to be limited, and more specifically as a cost that translates into future General Fund obligations. Which is to privilege future income tax payers (i.e. wealthy people) to poorer retirees with both the burden and the bill stuck to middle income wage workers. LMS is only one example of a 'reform' plan whose focus is simply on reducing future general fund obligations.Bruce Webbhttps://www.blogger.com/profile/13222670342780912788noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-5763772791858765912008-06-17T00:36:00.000-04:002008-06-17T00:36:00.000-04:00Looks to me like one of those self-contradictory C...Looks to me like one of those self-contradictory Congressional wish lists:<BR/><BR/><EM>2) Social Security reform-- <BR/><BR/>(A) must protect current and near retirees from any changes to Social Security benefits; </EM><BR/><BR/>Meaning the older are (once more, as after the '83 reform) going to get benefit levels that are more generous for their contributions than the young, who aren't protected from such (downward) changes to benefits. This contradicts (C) below.<BR/><BR/><EM> (B) must reduce the pressure on future taxpayers and on other budgetary priorities;</EM><BR/><BR/>By arithmetic, with a paygo system, this means reduce benefits to reduce tax collections and "pressure on future taxpayers". (And leave those trust fund bonds collecting dust unused?) But how are benefits to be reduced...?<BR/><BR/><EM> (C) must provide benefit levels that adequately reflect individual contributions to the Social Security system; and </EM><BR/><BR/>See (A) above and (D) below. <BR/><BR/><EM>and (D) must preserve and strengthen the safety net for vulnerable populations including the disabled and survivors;</EM><BR/><BR/>Referring back to (B), benefits must be cut in the future. <BR/><BR/>If following (D) we prioritize preserving the "safety net", the "social insurance" function, that means avoiding regressive benefits cuts that affect persons who rely heavily on Social Security benefits relative to other kinds of retirement income. Those are across-the-board benefit cuts such as delayed retirement age or a flat percentage reduction of all benefits, which are felt the most by people who <EM>need</EM> their SS benefits. <BR/><BR/>That leaves means testing high income folk out of benefits -- if you don't reduce benefits paid to low-income folk, and do reduce taxes and total benefits, who's left with benefits that can be cut? But this contradicts (C).<BR/><BR/>My guess is we'll just keep going down the road started in 1983. The older will be protected, the young and relatively well off will take cuts and lose money outright to the system. So for the young SS will be <EM>nothing</EM> like it was for their grandparents.<BR/><BR/>That is, A, B, & D will be followed, while C will go overboard -- or be interperted so that "benefit levels that adequately reflect individual contributions" continually become smaller and smaller for the younger and the more well off.<BR/><BR/>Warren Buffett's lucky he got his already!JGhttps://www.blogger.com/profile/11164150812219689611noreply@blogger.com