As I said in post #167, “...views of
fairness will likely vary.” So, although your views on this are IMO well reasoned, they are very different than mine. Here’s how someone with my view reads the points in your post:
I think we should look at "fair" from both sides of the issue. Is it fair to tell workers who struggle to earn ... Answer: Yes, because that’s always been the basis of the SS formulas; those who earn more will get more (but, less proportional to their income...in the interest of fairness).
Or to tell them they have to live up to a "commitment" that somebody else made ... Answer: Yes. Since we’re all arguing for change to the SS system, albeit different changes, change is a given. So, “they” have to live with risk of change like others before them. I’m simply arguing against last minute changes as being the most unfair.
I don't think it is "fair" to expect the taxpayers to make up all the difference. Answer: We’re all taxpayers, even retired people.
I don't think this problem should come as a surprise to the older generation. Answer: If I’m retired or nearing retirement, it certainly does come as a surprise; more appropriately, it’s what our word loving lawyer friends would call an ‘unfair surprise’ meaning one didn’t have time to react.
We've known about this for a long time, Red herring.
Flemming ...
Answer: Agreed. Justices are word people. But, the SS law is words, not numbers. And, my read of Fleming & dissents (I’m not a lawyer) is that the justices were having essentially the same “fairness” discussion that we’re having here. BTW, ‘majority’ does not mean ‘right.’ It simply means ‘majority’ at the time; think Dred Scott.
I cut out some of my words to save bytes.
I'll do the easy ones first.
"taxpayers" in that third paragraph refers to workers paying the SS payroll tax, both now and in the future. I don't think all the burden of modifying SS should fall on the tax side.
"Flemming". As I understand it, the law of the land is whatever the last SC ruling says it is. (I agree with you that I've found certain past rulings very bad.) Today's legal precedent is that congress can change the law, even relative to current beneficiaries.
You think that Douglas has a good argument and some future court may overturn that precedent. I'm not impressed by what he wrote. But, I don't think I'll speculate on what the SC might do in the future.
Regarding the harder stuff. I want to combine the discussion above into three decisions.
1) Since we have to make changes to SS taxes and/or benefits, should all of those changes be increased taxes, or should some of them be decreased benefits?
I prefer some reduction in benefits. I think SS is a good program, I like the paygo structure, I want to keep it. But, IMO it is bigger than it needs to be. I don't want to lock in the current benefit structure and just let it take a bigger share of GDP as the population ages.
2) If we're going to reduce some benefits, how do we do that?
I see SS as an income transfer program. It takes money from some people and gives it to others. I can support some gov't income transfer programs. I think in general, these programs should take from those with more and give to those with less. I see a conflict between that general belief and the current SS benefit formula.
I look at other programs that help the "everybody", not just the needy - Medicare, schools, police. None of these have special formulas to make sure the people who pay more tax get more benefits. I don't think SS should be the exception.
Therefore, I don't like reducing benefits by changing COLA or by increasing the FRA. Both of those impact low income people by the same percent as high income people, that's not the direction I want to go. (We sometimes say we need to raise the FRA because people are living longer. But note that higher income people are living longer, not lower income people.)
I think we should adjust the PIA formula. I mentioned "progressive price indexing" as one way to do that. I could discuss a faster system, but that's more words.
Two of the arguments for keeping the current structure are "we've always done it this way" and "the current approach is politically popular. Both of those are true statements, but I'm not trying to be politically popular, and some sort of change is a certainty.
3) If we're going to reduce benefits, how/when do we start?
You say it is too late to make changes to benefits for anyone over age ___ (we haven't tried to fill in the blank) because they will be an "unfair surprise".
I've quoted the warning on the front page of my 2001 SS statement. It's pretty blunt - SS Trust Fund exhausted by 2037, only 72 percent, need to make changes. Similar warnings year after year. And, I think people who vote should follow the news, at least a little. Clinton had a high profile commission in 1993, Bush had one in 2001, Obama in 2010.
I think changes to SS are a surprise only to the extent that people have assumed that "somebody else" would have to bite the bullet.
I know that one of the concerns about cutting benefits is "old people will starve". Note that I'm not recommending that we cut benefits on low income people. No COLA adjustment or increased FRA for me.
OTOH, I realize there are limits. The PPI above only applies to future retirees. I could talk about something that would impact current retirees, but anything on those lines would be gradual and limited.
I hope that covers everything in the post I quoted, even though I didn't go through it point by point.
I get it. I know how you're thinking about it.
