AFL-CIO Says Social Security Benefits Should Be Raised
From an
AFL-CIO press release:
It is time to stop thinking of Social Security as a problem and start thinking of it as a key solution to our retirement security crisis. ...
While Social Security is an obvious solution to the crisis, its current benefit levels are too modest. Social Security’s income replacement rate is one of the lowest of all the industrialized countries. To compensate for the decline of traditional pensions and the loss of retirement savings, Social Security retirement benefits must be increased across the board, which would be especially meaningful for low-income seniors. ...
The reason why the debate in Washington, D.C., has gone so far in the wrong direction is that the enemies of Social Security have spent enormous amounts of money spreading misinformation about the program. The truth is that Social Security is not in crisis. ...
The SSA trust fund has been depleted by 2 percentage points in 2011 and 2012 and both sides need to have honest discussions of the future of Social Security benefits. This program needs to be scaled back in order to meet the obligations of future generations. The Social Security trust fund MUST be seperated from the general fund but that is not going to happen anytime soon until the public demands this change.
ReplyDelete@anon 6:02
ReplyDeleteNo thanks. I'm not living off catfood just because the trust fund posted bad earnings during a severe recession.
Nobbins, have you seen the price of cat food lately? Things are even worse than you suspect.
ReplyDeleteActually, the OASDI trust fund balance is increasing in both 2011 ($69 billion) and 2012 ($95 billion) according to the latest 2011 report from the social security trustees. Far from being depleted, it continues to grow until about 2023 when the assets are needed to pay out benefits.
ReplyDelete2011 income into the OASDI trust fund was $808 billion and expenditures were $739 billion. I don't understand why people think that is a loss.
See http://www.ssa.gov/oact/TRSUM/index.html
It is a loss, because the government's budget is calculated on a cash basis.
ReplyDeleteThe numbers you include in income includes interest on the trust fund.
This is backed out of the equation to determine if the trust fund is running a cash surplus, because the interest is credited with additional debt, not paid in cash, like "normal" interest.
Don Levit
Getting back to the point of the AFL-CIO argument.
ReplyDeleteOne thing missing in any discussion of government provided retirement or even health insurance for that matter is the potential overall economic benefits.
A firm in financial crisis has less available crash for benefit packages and cuts those to preserve the core reason for the business to exist, which is to generate profit.
In down markets with surplus labor, only some niche employers need to offer good benefit packages to attract workers. In a robust market, the ability to offer benefits provides an advantage to established businesses.
If workers don't have to worry about losing their pension or transferring a retirement account or having suitable health insurance the calculation of employment to seek changes. A lower paying job with a start-up is a better deal if you wish to risk taking the ride to see if it becomes a solid business.
The risk of entry into starting a new business is less. Today you risk not only income but retirement security and health coverage. Taking one or both of those out of the equation makes starting new business less risky.
Instead of the debate being "government intrusion" vs. "duty to help all" maybe the proper debate is whether freeing business from the overhead of retirement plans and health coverage results in a net improved economy.