Michael Hiltzik brought my attention to something interesting, The Conservative Case Against Expanding Social Security? It Was Based on a Math Error. In December, the Congressional Budget Office (CBO) released a report that cheered conservatives. It stated that people on Social Security would end up making a lot more than was thought in retirement compared to the what they made at the end of their careers. Here’s Hiltzik, “To take just one example, the CBO reported in December that for the average retiree born in the 1940s, Social Security benefits would replace a healthy 60% of average late-career earnings. The new figure is only 43%.”
I probably didn’t notice the release of the original report because the Social Security argument that we get from conservatives is disingenuous. It doesn’t matter what the issue is, they will find a reason as to why it proves that we must cut benefits. Dean Baker and Mark Weisbrot wrote Social Security: The Phony Crisis over 16 years ago. But it could have been written today. The arguments they counter have not changed at all. So it is not at all surprising that conservatives took the fact that seniors would be “living it up” with a full 60% of their incomes while they were working.
The truth is that they might as well make the same argument using the 43% number. Hiltzik noted, “Personal finance experts generally say that it takes 70% of one’s working income to maintain a lifestyle in retirement.” And that tidbit comes from conservative Andrew Biggs, who was making the argument that 60% was excessively generous. So it really doesn’t matter: conservatives think what conservatives think; damn the facts!
But the really interesting thing is that Biggs wrote three articles on this subject recently. Two he has retracted because they were based on the CBO error. But one, he is not retracting because it didn’t use the CBO data. You see, Biggs has his own calculation that show that the CBO’s first estimate actually was the right one. That’s because there will literally never be any evidence that suggests that we are being stingy to our elderly population, because the conservative belief is that we shouldn’t do anything for seniors. They should just have really great investments like I’m sure Andrew Biggs has.
Social Security Attacks Get Worse As Need Increases
As the decades have passed, the conservative idea that people can plan for their own retirement has gotten worse and worse. And the reason for that is mostly because we’ve allowed businesses to do just what they want. So wages have stagnated. And benefits, in as much as people have them, have transferred from pensions to defined contribution plans, which have been a complete failure. Yet as workers’ other options erode, these conservatives want to destroy the fallback: Social Security.
Most people understand racism. When people are segregated, it is easy to vilify or discount “those people.” But it isn’t as well understood when it comes to economics. Those who write about economics are pretty far removed from the lives of the poor. We see this all the time with people like David Brooks who thinks that if the poor would just act more like the middle class their economic fortunes would improve. Sorry, but that ain’t the case and the only kind of people who make that case are people who start at the conclusion.
What’s more, the middle class is not doing very well in case this fact somehow slipped by. But it’s all part of the larger system: taking from the poor and giving to the rich. When people talk about means testing Social Security (as Biggs does), they don’t care about the money it would save the program, because it wouldn’t save much. They are just trying to head off an actually helpful solution like increasing the payroll tax cap. So again: the assault on Social Security benefits is, as always, just a fight to keep the taxes of the rich low.
Update (12 February 2016 8:14 am)
Dean Baker noted that this is not the first time that the CBO just happened to make mistakes that helped conservatives, Strike Three for the Congressional Budget Office? Social Security Retirement Income Projections.