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.
It is so annoying to see this sort of thing. My mom is on SS but since she has the double knock of being a woman and poor most of her life, she only gets about $800 and some change. And she fights with us kids for trying help her out. At least she still has a roof over her head since the house her parents bought is still around.
Following on my insidious point about sexism, anti-SS and other government programs also is something that is not as overt as this but when your college professor who is a barely in the closet libertarian teaching that the sole reason that the US government is in such trouble financially (which we are not) is because the government has extra money from SS (which is a inaccurate simplification that ignores why the change was made in 1983 anyway.) It is hard to fight against it. Even though I actually objected at that point because he went too far.
At least their attempts keep failing even if we can seem to get any where to fix the problem.
Your economics teacher was a dingbat! I was lucky, mine was a liberal. Not just a liberal; a certifiable madman liberal. If students made conservative talking points about “the deficit” in class, he’d challenge them to take it up with him outside. As in, fisticuffs. Really; he told students who disagreed with him to roll up their sleeves and duke it out. He was Australian, maybe that explains it.
I loved that guy. I drank too much the night before the final exam and missed the class. I went to his office and told him I missed the exam due to hangover. Fine, he told me. He just wanted to make sure I hadn’t gotten a copy of the exam questions from someone else. So we sat in his office for an hour, he’d write new exam questions, hand them to me, and I’d solve them while he was working on grading exams from earlier in the day. I didn’t lose a point off my grade for missing the exam. Like I said, Australian. If I’d told him I was hungover AND had bite marks from an angry dingo, I probably would have gotten an A+.
My mom hated getting assistance. She did it — until she got the first job of her life as a single mom in her forties, she had no other choice — but she hated it. Hated food stamps. Hated food baskets from church members far worse. At least food stamps are anonymous. Charity from people you know is demeaning and depressing.
I think we need to be reaching out to people who need welfare and making it clear how many other ways they can help society besides working. If you can’t work, you’re not a deadbeat. You can fix stuff in apartments the scumbag landlord won’t fix. You can help kids or other adults with homework. You can go with lonely old people to medical appointments. The overwhelming majority of people on assistance want to be useful.
It’s a savage waste of human potential that we demean people on assistance instead of criticizing ourselves as a society for not finding other ways to engage their talents.
He is an Introduction to American Law professor. Let me put it this way, when I am paying attention, I am the only one who answers the questions because I know all of the info already but need the class as a per-requiste.
And yes, that does explain it, Aussies are pretty odd ducks. :)
I’ve spent many an hour keeping the computers of my neighbors and relatives up and running — can someone please tell me which megacorp I should apply to for compensation?
Yeah, we are incredibly stingy to our elderly population, but all we hear from the power elite is how great they have it.
It amazes me what passes for a college professor these days. I wouldn’t find the prof being a full out libertarian. But he should have his facts straight. Those are just talking points from the Pete Peterson institute.
The reason they keep failing is because old people have the best unstated bumper sticker in the world: “I have nothing better to do than vote your ass out of office!”
That is true on the old people thing. Both of them.