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Discussion: (13 comments)

  1. Max Planck

    The pattern is “as long as it screws someone without a million in the bank, we’re for it.”

    No matter what. A philosophy that mandates that all wealth gets sucked upwards into a narrow overlord class.

    That’s the AEI in a nutshell. And what a nut it is.

  2. Hi Mr. Biggs, have you commented on Old-Age Risk Sharing, the Social Security proposal from Jed Graham of Investor’s Business Daily? It seems to me like a promising idea, but unlike you I’m not an expert on this issue. One feature, I think, is that he would raise the retirement age for high-income workers, but not for low-income workers. If I got that right, this would appear to make Social Security more progressive than it already is.

    1. Andrew Biggs

      I’m familiar with the plan and know Jed Graham pretty well; he’s a sharp guy and it’s a well thought-out plan. I suspect there may be a way to get at the same goals with fewer moving parts, and simplicity is a big factor for me since I think the current program is way too complex for most people to understand. But Jed’s plan would nevertheless be an improvement over the current setup.

  3. Paul Krugman is almost ALWAYS wrong these days. I often wonder if he’s not suffering from some form of premature senile dementia. How anyone who demonstrated such spectacular brilliance as a young economist could be so utterly absurd on so many issues over the past fifteen-odd years makes no sense otherwise.

    1. Krugman has a bad case of Bush Derangement Syndrome. And I certainly respected his earlier economics writing.

  4. 20% underemployment and you want to keep the elders working longer? aint enough jobs to go around as it is…

    1. Andrew Biggs

      Well, a) any increase in the retirement age would take place over a REALLY long time. E.g., in my example the retirement age didn’t reach 70 until 2075. Hopefully we’ll be out of the recession by then. And b) there’s no evidence that more seniors working means fewer jobs for younger people. Since more seniors with jobs means more seniors with money, which they’ll presumably spend, that will create more jobs among others. The Center for Retirement Research at Boston College recently published a paper showing that labor supply among seniors doesn’t hurt job prospects for the young.

  5. Paul Krugman was referring to raising the Medicare eligibility age. This entire post is about raising the Social Security age.

    1. Andrew Biggs

      Actually, his objections regarding longevity and so forth apply more to Social Security than Medicare.

      1. Maybe, but if you look at the quote you used, he is clearly referring to a raise in the Medicare age. It made me wonder why you chose to talk only about Social Security.

        But even if you do look at Social Security in isolation, you are not addressing the reasons given for why such a policy change would be regressive.

        As you mention in your post, the reason life expectancy is going up is because higher income people are living longer, not because everyone is living longer. Lower income people live a life of blue collar work and intermittent access to health care, so their health has deteriorated much more than higher income people when they are in their late 60s, so extending one’s working life by a few years will have a much greater negative impact on the health and savings of lower income people than on higher income people. That makes it a regressive policy.

        1. Mark Buehner

          That might be true in isolation- but you can hardly separate the benefit end from the contribution end. The money HAS to come from somewhere, and payroll taxes are remarkable regressive. You can only milk the wealthy cow in so many ways. What we end up with is a massive transfer of wealth from from the poor young to the (relatively) wealthy old. That makes no sense. You feed the cycle of poverty by sucking away money from the young that could be used for building wealth via home ownership, establishing a healthy family, education etc… all of which are habits that lead to long and healthy life. Thats a nasty cycle.

  6. Jeff Innis

    “Truly low-income individuals are disproportionately on disability, which wouldn’t be cut by an increase in the retirement age.”
    Evidence please? And those that aren’t ( on disability ) are just SOL, right?
    That the results ” are hard to interpret” simply shows how fuzzy making projections of this nature are. And when it isn’t your welfare that’s being affected, being fuzzy is fine, right?
    Better to simply raise the payroll tax ceiling for SS, and implement means-testing for Medicare.

    1. Andrew Biggs

      I can dig up the data on disability, but do you think high income people are more likely to claim DI?

      When I say the results are ‘hard to interpret’ it’s because there’s a slight decline in the share of benefits paid to the absolute poorest individuals, followed by an increase for the second through fourth quintiles, then a larger decline for the highest-earning quintile. It’s not unambiguous, but it’s clearly not ‘hugely regressive’.

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