Changes for Social Security?

I recall hearing a while back on NPR’s Marketplace program (here’s the story) that FDR designed Social Security’s funding through payroll taxes would make it impossible to change, and that some are worried that the payroll tax cut threatens the program. I just read recently that Senator Tom Harkin (D-Iowa) made a similar point. A Forbes article makes the same point. It’s darkly funny that when everyone knows that Social Security is in bad financial shape, one of the few things that our parties can agree on is cutting the taxes that fund it. There are plans to replace the lost income, which you can see in the stories.

Another interesting thing is that while Republicans don’t want to generally talk about ending Social Security, they have been talking (for a while, I think) about means-testing entitlement programs to focus on those who need them the most. Interestingly, this would make entitlements more redistributive than they are now because it would tilt the benefits more to the bottom and away from the top (if I am understanding those things correctly). Usually, redistribution is not a favorite conservative concept, although these reforms would help us to manage our finances better, which is a favorite conservative concept.

Let’s say the entitlements were means-tested. That might have the effect of reducing the constituency that supports them because people with more resources would be getting less. Perhaps there’s a larger strategy at work in this tactic that is taking the initial steps to eliminate these programs decades down the road.

I’m not taking a position in this post about whether entitlement programs like Social Security and Medicare are good or bad. I have my doubts about their merits and my doubts about eliminating them.

Advertisements

2 thoughts on “Changes for Social Security?

  1. SS and Medicare were designed to be unsustainable in the demographic climate we find ourselves in. They will bankrupt this country and eliminate themselves if not revamped. What do you do, though, with all the ignorant people who believed the lying bastards at the AARP who told them it was basically fine with just minor modifications? Is society ready for the norm to once again be either saving until one is a multi-millionaire or moving in with one’s children as one gets old.

  2. Right, you need the increasing population to maintain them (which means there is an interesting link to what you said before about the modern West’s need for immigration to maintain population).

    I wonder if society will be ready for it. Living with one’s children as an older person would probably be a healthier model, but difficult to adapt to the modern golf and cruise till you are confined in a nursing home model.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s