The problem isn't that Americans have gotten intrinsically lazier. They're just responding to a wonderfully intentioned system that in practice promotes greed and sloth. Social Security is widely thought of as a kumbaya program that unites Americans in caring for the elderly, but it actually creates ugly political battles among generations.Tierney goes from this to promoting personal/private accounts on the theory that it will create incentives to work longer. Wouldn't it be a lot easier just to raise the retirement age? Why use words like "greed" and "sloth" if you're going to end up with a proposal based on restructuring financial incentives? Why not come out and tell us that reason and fairness support an obligation to work a few more years before collecting benefits for the rest of our lives?
With the help of groups like AARP, the elderly have learned to fight for the right to retire earlier and get bigger benefits than the previous generation - all financed by making succeeding generations pay higher taxes than they ever did themselves.
IN THE COMMENTS: Responses that show why politicians don't dare to suggest the obvious, obvious solution! Make this proposal and the practically next words you hear will be "dog food."
UPDATE: Dr. Weevil shows why you'd be a fool to resort to dog food to try to save money.
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48 comments:
With all due respect to Mr. Tierney, not everyone works in an office. In fact, quite a few people work at jobs that require more physical than mental effort and no matter how good a shape one is in it is much harder to do physical labor at 65 than it is at 25, 35, or even 45.
Working an assembly line or bending over an engine or throwing boxes into a UPS truck takes on a whole new meaning when your back hurts with old (middle) age.
So I wouldn't assume that a person is greedy or lazy because they want to retire at 65.
They may just be worn out.
Total agreement. It would be nice if we could work out a 2-tier retirement system. I don't want 70-year-old truckers on the road or 65-year-old roofers on my roof or 68-year-old sanitation workers lifting my trash; I'll be actually happy to work longer at my office job if in return they can retire earlier.
This problem is there wherever you draw the line. Nothing prevents a person with an active job from taking on a less demanding job. What 65 is today isn't what it was when the line was originally drawn at 65. People just aren't "worn out" at 65. We're talking about expecting young people, people struggling to provide for children, to pay for your leisure. I'm just not that sympathetic to people saying they need to retire at 62 or 65 (not all that much older than I am). You're bringing up a problem with hard physical labor that would justify having 50 as a retirement age.
well, I know any number of old farmers still plugging away on their tractors most every day. Let's not get too carried away here with sympathy for the geezers. I think many Seniors have a pipe dream of their children sharing their wealth with them once they grow feeble and start consuming dog food for at least one meal a day to save money. We know that's not going to happen, so let's not get too weepy and mushy. The infamous words of Thomas Hobbes may have to be resurrected to set this matter straight. The American dream is that life won't be nasty, brutish and short, not that it can't be.
Any Western history buff will recall the Santee Sioux revolt in Minnesota in the early 1860s, when the ire if Natives was raised when the local Indian agent in response to their plight uttered the infamous words, "let them eat grass". The upwardly mobile go-getters of today are saying essentially the same thing about geezers, " let them eat dog food".
With all due respect, Ann, and believe me I do respect you -- some jobs do wear people out by 65. You and I are fortunate enough to be in professions where there is little wear and tear on our bodies, but like phillywalker said, a guy who is 65 years old has a hard time of hauling shingles up a ladder to do roofing. Hell, my back requires physical therapy now and again and I am only 48 -- I can't imagine what it will be like when I am 65, yet I will keep on working because at that age I will no doubt be some high paid security consultant sitting in a nice chair at my computer. But I shudder to think how I would feel if I actually worked for a living and had to keep working with this fricken back.
And as to changing jobs -- are we talking government paid job training? A roofer with a high school education is going to jump to an office job requiring computer skills? At 65?
Hmmm, maybe McDonalds will hire him but otherwise, I just don't see it.
And I am not having sympathy pangs for geezers, believe me. If a guy can work until he is 70 that is fine with me. I just do not think you can automatically compare someone who works in an office with someone who does physical labor when it comes to retirement age.
Besides, maybe we should take a closer look at the quality of food we're asking our dogs to eat.
[sorry, badly edited before. New attempt]
Ann, I think we're talking around and about how folks perceive an entitltement program that's for everyone. Who said that the definition of an entitlement program is something you're not entitled to? I agree in principle that at issue, for the middle class, is a notion of expectedleisure, when the demographics may no longer support the financial basis of that leisure.
Still, folks never like when the game's been changed before the last quarter; and for folks in their fifties, that's the prospect or, at least, the prospect they perceive. That they preceive this is not just wishful thinking. We all who "pay into" Social Security have started to get from "the gov't" an annual statement of what we've paid each year. I scrutinized my statement this year; and nowhere is it clear that that accounting is a total of what I've paid toward checks that go to seniors.
Another concrete example: I participate, like many, many people in TIAA-CREF. On their web site, I can do projections of benefits to be paid to me upon my retirement, at different ages, to see when I might retire in whatever style I might wish to be accustomed. I can choose to include expected Social Security benefits or not. I have not done so for many years, because I have thought for longer that the numbers were funny in large part because they are so politicized. But even private orgs and financial palnners have for decades been advising middle class folks based on what so many thoiught was a promise.
What of the millions of folks who never had much expendable income and who didn't need to find it, because "the government woudl take care of them with the Social Securioty into which they were told they were paying?
Sure, we all need to make choices and remember the purpose of Social Security was in fact in 1935 to keep old folks out of poverty. But I don't feel badly for politicians who also have made promises they can't or don't now want to keep about working hard and playing by the rules.
It's not folks who have been playing by the rules who should have their character and motives impugned.
This illustrates the biggest problem I have with AARP, and I say this as a member. Social security is so politicized now that it seems we can't even have a serious national conversation about problems with the system. Oh, a few people try, but the political risks are absurdly high. And all the while AARP is sending me scary propaganda that seems to suggest that the dog food cliche isn't all that improbable unless we all fall in step with the AARP party line and fight for our "rightful benefits". The underlying message is one of selfish entitlement, and if getting what we think we deserve means taking more and more from our children and grandchildren, AARP seems only too willing to sweep that unpleasant bit of dirt under the carpet.
Our society has changed since 1935 and so has retirement. AARP's sexy seniors biking through Tuscany are an inadvertent advertisement for reform. Every law, every entitlement, hurts (and privileges) someone; society's job is in a way to make sure it's the fewest and the most appropriate who take the hit.
I worked in workers' comp, so I know what physical labor, even "light" factory work, does to people. It's unrealistic to assume a 50-year-old factory worker with bad knees and back can launch a second career, but Social Security Disability will still be available for those people.
The reason they won't raise the age, though, is because this is a "juice" issue, one that draws out the grass roots activists and the PAC/lobbying money.
I agree with the first comment. Not everyone has the luxury of having an office job. And despite Althouse's unsupported pronouncement that there are no barriers to people taking less demanding jobs, there are. Things like education, intelligence, work history, physical capabilities, language skills, job market (local and national), etc. may all act as barriers.
Many of the same people who have physically demanding hourly jobs also have poor health care or come from cultures that do have the same attitudes about health care that Americans do. Poor health care only adds to the body's stress. So while it may be true that some people aren't "worn out" by 62 or 65, many are.
I would much rather see benefits tied to need than make those in physically demanding jobs work longer. I won't say it's all republicans, but many seem to have the attitude that it is almost always an individual's own fault for not having a life that was not as easy as those arguing to cut benefits/raising the retirement age.
I have a different take on the subject. Based on tax and other laws (also corporate rules), there is implicit and explicit encouragement to retire once you hit your mid 60's.
The two examples that I have in mind are the extra tax that you pay if draw Social Security and work at the same time (the marginal rates can approach 60-80%), and companies that have a retire at 65 policy. See Daniel Gross piece at http://slate.msn.com/id/2081900/ about the fact that many CEOs have to retire at 65 (GE, ALtria, ExxonMobil, Intel, etc...)
So before we go too far in blaming people for retiring "early", we should remember that some of them are "forced" to retire at 65.
Another term for Social Security is "sacred cow."
In an earlier column, Tierney compared what Social Security will be paying him to that which a Chilean friend is going to receive under that country's private-account driven retirement system. Chileans, on balance, can expect to do much better with Chile's social security program than any of us Americans with our system. Perhaps that's why Tierney jumped to a discussion of private accounts.
But to your point, I absolutely agree that with longer life expectancies goes better health for longer stretches of people's lives, on average. This set of demographic shifts alone, apart from the long-term financial prospects of Social Security, indicates that even a one- to two-year bump-up of the standard retirement ages would be advisable.
To another one of Tierney's points: The AARP is one of the least responsible self-interest groups in the country. They play a creepy game of demagoguery on the whole question of Social Security reform, deceiving their own constituency and intimidating people from doing anything about reforming the system.
President Bush may have been wiser to tackle Medicare, the solvency of which is much more at risk than Social Security.
Or, perhaps he would have been best-advised to do something about health care. A Republican dealing with this issue would be like Nixon going to China; Nixon's diplomatic initiative was totally unexpected from a Republican President, especially an old Cold Warrior. No Republican was going to speak against Mr. Nixon for his initiative,irrespective of their true feelings about it and of course, Democrats couldn't say a word against a policy which they themselves had long advocated.
Mr. Bush would have similarly confounded his critics and shut the mouths of his opponents and so, been able to reduce the unnecessarily high costs of health care in this country. No Democratic president, as Bill Clinton proved, can likely pull that off.
I suspect that it will take a Democratic president with the courage to break with partisan orthodoxy to meaningfully reform either Social Security or Medicare. It has become too much of a cliche to say that Republicans would prefer dismantling those programs for a Republican President to successfully make it happen, even with a Republican Congress.
Most thoughtful people seem to agree that whether you incorporate private accounts for younger workers or not, assuring the future solvency of Social Security is an easy fix: Simply raise the retirement age by a few years, as you suggest.
My biggest problem with the old age dole is that it is a welfare program for the middle class. Clearly, some people need this kind of help. Also clearly, the entitlement aspect of it changes peoples saving and investing behavior when they are younger. Take away the "promise" of middle class entitlements, and able people will take care of themselves (see, for example, welfare reform). As a nation, we are wealthy enough to take care of the people who really need it - I say means testing for all, phased in over 10-20 years.
I think the problem lies in the fact that we have increasingly longer lives. Back when a man might only live to 70, retiring at 65 would not have been as big a deal.
We need to do real, objective tests on the health and competence of people at older ages, and from there determine proper retirement ages. It's no use talking about "I know farmers who are still going away on their tractors" or "I have backpain, imagine what it'll be like at 60". These kind of emotional arguments won't help us to actually define a good age for retirement.
"I think the problem lies in the fact that we have increasingly longer lives. Back when a man might only live to 70, retiring at 65 would not have been as big a deal."
I keep hearing people say that the problem is the longer lifespan, but I think that's not the real issue. The real problem is the birthrate. Americans are just not having enough children to replace the population even with mass immigration. If we change Social Security so that it requires a couple have at least 2 children or no benefits, this would do quite a bit to shore up social security's base. I've often wondered if the social security many people receive should come directly from their children's paychecks. This would provide a direct and obvious connection between the next generation and social security. It might also highlight the injustice of putting this burden on your children's back. This would cause many more parents to care quite a bit about their children's education and future career prospects since how much retirement money they get would be dependent on how well their kids do in life plus how much they saved.
With SS, in a sense, people who don't have kids are freeriders and taking advantage of the hard work and time needed to raise a kid as well as the amount of financial investment raising children now requires.
well then lindsey, I guess old people who don't have kids (or whose kids have died) shouldn't be allowed any government benefits, since their kids aren't paying any taxes. why stop at Social Security?
How ironic of Mr. Tierney to claim that people who have worked their whole adult lives, and paid into Social Security, are "greedy and slothful" to retire when they are legally entitled to under the system. Nice way to frame your arguments there sir.
As a side note, it seems pretty clear to me that a gradual increase in the retirement age under the Social Security program will be implemented in the next few years.
And I just don't see the argument that today's seniors are selfishly burdening their kids and grandkids. Seniors paid into SS. Their offsprings are paying into SS. Their offspring will receive SS when they themselves retire. The whole point is to prevent kids and grandkids from being forced to expend their resources on taking care of the grandparents in their old age. They can spend that money on their kids' education.
""A wonderfully intentioned system that in practice promotes greed and sloth.""
Gosh, that describes so much of modern government, doesn't it? Except that by now the intentions should be suspect as well....
Anyway, I'll retire when I choose, on my own savings, and live as I please. And my charitable contributions will go where they're needed (e.g. Central America or Africa, where people are actually starving) not to pampered American geezers who by age 60 have had plenty of opportunity to either save for their own retirement or learn to like dog food.
Kathleen: I think he's saying the system is structured to give people the incentive to retire -- that the natural tendency toward self-interest is destructive and the system ought to be restructured to get the right incentives in place. I'm saying it would be a lot easier to fix social security by raising the the retirement age by a year or two -- which, I believe I've read, is all that would be needed. It's so simple! I really don't see why people freak out about it. You still get to retire and collect your benefits, you just work a little longer as is entirely justified by improved health and increased life expectancy.
I've found the same sense of entitlement in government. I've worked with cops for over 10 years and come from a family of public school teachers and many of these municipal and state employees are beginning to sound European in their "right" to retire at 50. Cops in CA can retire after 30 years bringing home 90% of their pre-retirement pay -- often times resulting in pensions of well over $100,000/year at 51 years old.
No one respects cops and the work they do more than me, but we can't feed poor people, educate all or most of the children and support baby boomer public servants for 30 odd years. Something has to give.
Kathleen B, if you don't have children, then you have a lot of extra money that can be saved. I've read that the amount of money necessary to raise a child in a middle class lifestlye today is approaching half a million dollars. Most people would love to have that much money saved for retirement. And since those people without children, also have plenty of time to work and pursue their career, I don't see the problem.
I have no objection to making sure people whose children have died receive benefits.
Speaking as a cop, I am forced to retire at 57 when I would gladly stay on a few more years. The thing is, and I risk pissing off Ann by saying it again, some jobs take more out of people than other jobs.
No doubt 30 years as a cop drains a person more than 30 years as an accountant and even if it does not, certain jobs DEMAND more out of a person than others whatever their age. I mean, do you really want a 65 year old cop running after the guy that just mugged you, or a 65 year old firefighter trying to drag you out of a burning house?
As I said, raising the retirement age seems like an easy fix and in the vast majority of cases it would work. It was the automatic assumption of lazy and greedy that seemed unfair to me.
It is impossible to generalize about this and I do believe the retirement age should be slowly increased for those able to work and benefits curtailed for people with substantial wherewithal. But what about Airline Pilots forced out at age 60? My wife and I were fortunate to have our son with us for 21 years before he was killed. We were unable to have a second child. What about our SS benefits? By age 63 I had Congestive Heart Failure, and at 70 am barely able to make it up one flight of stairs. Could you find me a job in rural Georgia today?
At age 65 I went to work at a golf course operating fairway tractor mowers at $7.00 per hour By the time you take FICA and witholding and pay for gas for a 60 mile round trip each day, I was making about $3.00 per hour. I was laid off after a couple of years because my of heart. Should I give up my social security?
When I joined the workforce in the 1950's we were expected to work at the same company until 65 then retire and get a small pension to supplement our SS. I expected to work for 45 years, but was forced into early retirement at age 51. Those were the years when I could finally afford to focus on my 401K and retirement savings, but I was now out of work. Taking a big cut in income put me and many of us right back into the paycheck to paycheck mode. Don't blame us geezers for the current mess, we did what we were expected to do and got the short end of the stick.
Thank God for SS, Medicare and Wal-Mart, otherwise we'd be in terrible shape.
The problem that I see Lindsey, is that you are proposing a totally unworkable idea. What if I don't have kids, but I have to take care of my parents who don't get social security, and my disabled brother? or I have my own health problems? or I can't work at a high paying job because of a mental illness I have developed (or that my husband has)? The government cannot dole out social security based each person's individual situation (you have no kids, and a fat 401k, so no SS for you), unless we dramatically increase the adminsitrative costs of the program. And it seems like most people don't want to increase what they are paying in.
Besides which, your comments are just a misunderstanding of what social security is. Social security is an insurance system. Allstate doesn't say that you can't collect when your house gets robbed because you don't have kids so you have enough money to replace your stuff.
Prof. Althouse - I do totally agree, raising the retirement age is a simple solution that makes sense, and I do really believe that it is inevitable. In my opinion it would have happened sooner if the President had taken a different approach in his reform attempts. But it seems that he is going to have to switch gears soon (maybe?).
"What if I don't have kids, but I have to take care of my parents who don't get social security, and my disabled brother? or I have my own health problems? or I can't work at a high paying job because of a mental illness I have developed (or that my husband has)?"
You would presumably get disability (which I have absolutely no problem with) as well as Medicare or Medicaid.
"The government cannot dole out social security based each person's individual situation (you have no kids, and a fat 401k, so no SS for you), unless we dramatically increase the adminsitrative costs of the program."
I don't see why this couldn't just be done with a computer program. Programs like Medicare (and probably Social Security) will eventually be means-tested anyway.
"Besides which, your comments are just a misunderstanding of what social security is. Social security is an insurance system."
Bwa! No, it's not. It's a Ponzi Scheme. If a private individual or company created something like it, they'd go to jail.
there are many, many things the government does that private individuals and companies cannot do.
Since you called SS a "Ponzi scheme", I understand that you are in favor of dismantling it. (why else use the RR talking points?) As such, I can see we won't find a common ground on this subject.
There's no law requiring anyone to keep working until they get Social Security. If the eligibility age is raised and you don't want your retirement age to go up along with it, you need only save enough to fill in the gap between retirement and SS.
As a baby boomer public servant, I'm glad Troy has brought us up. The burgeoning cost of our early retirements should certainly be on the table along with SS.
Note to Kathleen B: Another thing Allstate doesn't say is that you can collect whether your house gets robbed or not. Means-testing, anyone?
Old folks forced to eat dog food to save money is almost certainly an urban legend. Dog food isn't any cheaper than human food. I posted the evidence here.
I gotta start living under a new rock. Here I thought the SS retirement age had already been raised. I keep getting notices from the govt that I can give up the work-a-day ghost at age 67 & receive full benefits. Why the lies?
I gotta start living under a new rock. Here I thought the SS retirement age had already been raised. I keep getting notices from the govt that I can give up the work-a-day ghost at age 67 & receive full benefits. Why the lies?
Wandering mind... Your last comment reminds me of the scene in "The Untouchables" when Sean Connery is running after one of Capone's bad guys and he eventually gets tireed yelss "Enough of this running shit" and squeezes off a few rounds from his Tommy gun. I knew a Texas Highway Patrol trooper (since retired) that was older than God and I wouldn't have messed with him. You knew he wasn't going to fight you.
"Note to Kathleen B: Another thing Allstate doesn't say is that you can collect whether your house gets robbed or not. Means-testing, anyone?"
But retirement triggers the insurance, so your analogy is inapposite.
and means-testing transforms SS from an insurance policy to a welfare program (forcing wealthy people to pay for a benefit they will not receive). and we all know what happens to welfare programs.
In an article by Robert J Samuelson, he writes:
In 2003 about 60 percent of Americans ages 55 to 64 had jobs. The comparable figures for France, Italy and Germany were 37 percent, 30 percent and 39 percent.
I'd like to suggest moving the SS benefits receiving age down to 34. My job is reeeealllllllly hard. REEEALLLY really realllllly hard, (you probably wouldn't think so, but I do) and what's more, I don't even like it! I'm worn down- burnt out- worn out... I 'd also like to suggest that I should be allowed to receieve state subsidised medical marijauna to help me deal with the stress I'm under, which is brutal, and, I think, has left me permanently in need of weed.
Thank you.
(I realize I'm late to this discussion and most likely no one will read this anyway. But I intend to indulge myself anyway)
Kathleen B: Social security is an insurance system. Allstate doesn't say that you can't collect when your house gets robbed because you don't have kids so you have enough money to replace your stuff.
My understanding of insurance is that it is supposed to protect against unexpected events. Hence, Allstate offers homeowners insurance because having your home robbed is a fairly infrequent and unexpected event. Thus, social security fails the "insurance" test miserably. Retirement is a normal, expected even that occurs for each and every person in the United States.
Social security bears more resemblance to a national forced savings scheme (albeit one where I have no claim on my actual deposits) than it is to an insurance scheme.
A couple of points. Probably will separate them.
One of the best descriptions I have heard of SS is that it is a welfare program hidden in a massive intergenerational middle class wealth transfer program from the young to the old sold as a middle class retirement program.
And this is why it is hard to change. If you start means testing it, it loses its political support from the upper middle class, who have contributed the most through their productive years. And if you cut benefits, you put pressure on those who depend on it as essentially a welfare system, and, thus, lose votes on the left.
You have the same problem removing the cap on contributions without removing the cap on benefits - the program will lose critical upper middle class support, as it becomes more and more an income distribution program from the upper middle class to the lower middle and lower class.
So, the answer, short of major surgery, as the President suggests, is to inch everything up a little at a time. Retirement age. Caps on contributions, etc. Not fast enough to scare the upper middle class into abandoning it.
I see some of the same culprits here as I saw in the school voucher thread, and I am trying to make a similar point that I tried to make there.
I indirectly pointed out in my previous post that the true nature of SS is somewhat obscured. This is intentional, so that it will have mass appeal.
But note, even in this discussion, it is obvious that we all know the purpose of SS, but if pinned down, we don't agree. This is evidence of Heyak's criticism of communitarianism, and, thus, socialism.
Is it a retirement program? Some believe it is. How about a welfare program? Some believe that too.
The point is that while we all agree in the program at some high level of abstration, we all have somewhat different views of what the program really is and is supposed to accomplish.
That may have been its strength these last 70+ years, but I suspect that it is rapidly becoming a weakness.
My understanding of insurance is that it is supposed to protect against unexpected events. Hence, Allstate offers homeowners insurance because having your home robbed is a fairly infrequent and unexpected event. Thus, social security fails the "insurance" test miserably. Retirement is a normal, expected even that occurs for each and every person in the United States.
No, that is not correct. Lots of people die before retirement (or early into retirement) and so do not collect. Insurance isn't about "unexpected" events, it is about contingent events and about spreading the risk. And that is exactly what Social Security does.
Weevil's comparison is bogus...he's talking about buying Alpo, for God's sake!...who does he think he is, Rockefeller? Buy the generic dry stuff in the big bags! Maybe on special occasions you can have the kind that makes its own gravy, but don't overdo it....
Kathleen B: "Insurance isn't about "unexpected" events, it is about contingent events and about spreading the risk. And that is exactly what Social Security does."
I just Googled the definitions of insurance. All of the most common defintions include the concept of protection against financial risk (or loss) resulting from specific events. What risk is social security protecting me from? The risk of retiring before I die or the risk of retiring without enough money? It certainly can't be the "risk" of retiring. That's more of a certainty.
If social security is intended to protect against the risk of retiring (or being physically unable to work) without enough funds saved, then it should definitely be means tested. A retired individual whose private assets allow them to live comfortably should not be drawing insurance payments.
Joe: The risk is of living beyond your working years. When the program began most people did die before qualifying. The people who collected were the ones who lived too long, which seems too positive, but it's really a negative financially. Those who died and therefore did not collect are equivalent to people who have auto insurance but then never have an accident.
The risk is of living beyond your working years.
I don't think most people regard staying alive as a "risk." Anyway, the risk of disability, whether due to age or any other reason, is already covered by other parts of our welfare system. People see SS as a source of retirement income, and will support it as long as they think they're getting something for nothing...when they realize they're not, the scheme will collapse.
Smilin' Jack: Whether people are realistic enough about life to think of this as a risk is irrelevant. It is a financial risk and that is what one is insured for. It works because some collect and others don't. The personal accounts approach, where people who die early get to pass the money along to their heirs, fundamentally changes the nature of the program.
It works because some collect and others don't.
Well, I've heard it called a Ponzi scheme, but this sounds more like a tontine, that favorite gimmick of mystery writers (e.g. The Wrong Box)
It does suggest another way to save the system, though...encourage people to die young. Let's require cigarette vending machines in all schools!
Smilin' Jack: It's absolutely true. The tobacco companies had an argument that they declined to use. Smoking costs society some money, but it also saves a lot of money. On balance, the dying smokers are not taking out more than the healthy agers.
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