… at least, if you read no farther than the headline:
Congress and President Obama have pushed through a relatively modest stopgap measure to avoid the “fiscal cliff,” but over the coming years, the United States will confront another huge cliff: Social Security….
For the first time in more than a quarter-century, Social Security ran a deficit in 2010: It spent $49 billion dollars more in benefits than it received in revenues, and drew from its trust funds to cover the shortfall. Those funds — a $2.7 trillion buffer built in anticipation of retiring baby boomers — will be exhausted by 2033, the government currently projects.
Now of course there is no such thing as a ‘Social Security trust fund.’ There’s no Scrooge McDuck money bin where all our derisory widow’s mites have accumulated over the years. It’s an accountant’s jeu d’esprit: cumulating a certain category of payroll tax revenues and a certain category of government expenditures and subtracting the latter from the former. So any time people start talking about the solvency of Social Security, it’s time to count the spoons and go long on cat-food futures.
The Times catfooders do not disappoint. They go on and float some possible approaches to dealing with this entirely imaginary crisis:
tough choices have to be made. One option is to continue raising the retirement age, perhaps to as high as 69 or 70. While the full retirement age is gradually increasing to 67 (for people born in 1960 or later) from 65, this increase is not enough to counterbalance the gains in longevity.
A second option is to increase payroll taxes, for example by taxing wages over $113,700, the current earnings limit. A third is to limit the annual cost-of-living adjustments, possibly by changing how those adjustments are calculated. A fourth is to reduce benefits — for example, by lowering the initial benefits for workers whose lifetime wages are above the national average (currently $43,000 a year). Other choices, in numerous combinations, are possible, too.
One factor that might be considered is new research suggesting that retirement itself, although popular, may reduce life expectancy by breaking lifelong routines and disrupting deep social connections. One might question how much government policy should actively encourage retirement, as opposed to merely making it an option.
When I hear the phrase ‘tough choices,’ I go for my Browning. The choices are going to be made, and they’re going to be tough, but they’re not going to be tough on the people making the choices.