Retiree Entitlements ‘Undermine’ Everything Else

[mickeyd]

I still do not put myself in the catagory of "elderly" but I bet that many (most) others do. I guess that I'm on the entitlements bandwagon as I receive SS payments, medicare, pensions, don't work a lick...maybe I am part of that elderly group after all. Damnit!

“Domestic discretionary spending,” he added, “a category that includes food inspectors, the FBI, the National Weather Service and many others—faces a similar fate. By 2023, this spending will drop 33% as a share of national income, estimates the Congressional Budget Office. Dozens of programs will be squeezed.”

And whether or not politicians deal with it is of little matter; decisions will be made.

“Choices are being made by default. Almost everything is being subordinated to protect retirees. Solicitude for government’s largest constituency undermines the rest of government.”

This is an “immensely important story,” he noted, and one almost totally ignored by the media.

“One reason is that it’s happening spontaneously and invisibly: Growing numbers of elderly are simply collecting existing benefits. The media do not excel at covering inertia.”

Turning his sights to the aforementioned politicians, Samuelson writes that liberals “drive this process by treating Social Security and Medicare as sacrosanct.”

“Do not touch a penny of benefits; these programs are by definition progressive; all recipients are deserving and needy. Only a few brave liberals complain that this dogma threatens programs for the non-aged poor. “

Retiree Entitlements

 

[Mulligan]

Mickey, I have learned that "old" is a constantly moving target usually at least 10 years above your present age. I remember about 20 years ago, my then wife's grandmother who was about 70 at the time commenting about a persons death and that he died "young". He was approximately her age. I was thinking to myself that seemed awful old to me and nowhere near "young". As the years pass, I don't know if my definition of young has changed much, but my definition of old keeps climbing though.

 

[Midpack]

As the years pass, I don't know if my definition of young has changed much, but my definition of old keeps climbing though.

But have you noticed how there are more and more young people as the years pass. Where are they all coming from?

 

[pb4uski]

The whole notion of SS benefits being sacrosanct is why I refused to renew my membership in AARP last November. Their answer only seems to be to raise SS taxes because according to them their surveys tell them that's what people want. Bull-youknowwhat. I think the solution needs to allow all options to be on the table, not just increasing taxes.

 

[Midpack]

The whole notion of SS benefits being sacrosanct is why I refused to renew my membership in AARP last November. Their answer only seems to be to raise SS taxes because according to them their surveys tell them that's what people want. I think the solution needs to allow all options to be on the table, not just increasing taxes.

+1, never joined for the same reason, agree with the rest of your POV too.

 

[haha]

The whole notion of SS benefits being sacrosanct is why I refused to renew my membership in AARP last November. Their answer only seems to be to raise SS taxes because according to them their surveys tell them that's what people want. Bull-youknowwhat. I think the solution needs to allow all options to be on the table, not just increasing taxes.

AARP attempts in a weak way to be a union for retirees and older people. A person joins because his interests tend to coincide more with these groups, than they do for example with any one of 100s of other employee unions, pressure groups, etc., etc.

If I thought that AARP did this more vigorously and effectively, I would join. As it is, I think they are less effective at being a union for oldsters than they could be. Older people are inherently in a weak position, we need to do what we can.

Ha

 

[BLS53]

The whole notion of SS benefits being sacrosanct is why I refused to renew my membership in AARP last November. Their answer only seems to be to raise SS taxes because according to them their surveys tell them that's what people want. Bull-youknowwhat. I think the solution needs to allow all options to be on the table, not just increasing taxes.

Agree. I've recently noticed an ad blitz on some news/talk radio stations from AARP, preaching how going to the chained CPI would devastate seniors.

Changes are going to have to be made, and the chained CPI is the least of many evils. AARP is compounding COLA changes over who knows how many years, and coming up with some astronomical dollar amount in an attempt to scare people. If you crunch the numbers, the difference between the current CPI and the chained, is less than $10 a month for the average SS payment. I suppose someone retiring with the max SS benefit, and living to 100 years old, could come up with a total COLA loss approaching AARP's claim.

 

[Stanley]

The current interest rate environment has resulted in a huge transfer of wealth from savers (called old people) to borrowers (called young people). These things work both ways.

 

[heeyy_joe]

I think AARP is a valuable lobby for retired persons. As such, their positions help begin a starting point for negotiations, much the same way the NRA lobby does the same for the 2nd amendment.

As for a social security solution, I expect that a blended solution will eventually be enacted - raising the cap on earnings, chain CPI, a very modest 25bpts split between employer/employee, and a raise in the retirement age ranging from 1 month up to 2 years depending on your year of birth. Nobody will be happy yet both political parties will claim victory.

 

[pb4uski]

I think AARP is a valuable lobby for retired persons. As such, their positions help begin a starting point for negotiations, much the same way the NRA lobby does the same for the 2nd amendment.

As for a social security solution, I expect that a blended solution will eventually be enacted - raising the cap on earnings, chain CPI, a very modest 25bpts split between employer/employee, and a raise in the retirement age ranging from 1 month up to 2 years depending on your year of birth. Nobody will be happy yet both political parties will claim victory.

Those solutions seem to be a sensible place to start discussions to me, but each side is so entrenched I don't have much hope that something sensible like you outline would actually be enacted. Unfortunately IMO the politicians lack the courage to try to do the right thing for the country and most of the people. I hope that I am wrong.

 

[donheff]

The current interest rate environment has resulted in a huge transfer of wealth from savers (called old people) to borrowers (called young people). These things work both ways.

Interesting point. We conservative oldsters are funding those 3% mortgages that didn't exist in our days. As to the primary argument, it is pretty obvious that some changes are going to be made to Medicare - chained CPI at the least, but probably more cuts. What is preventing that from happening immediately is a simple concession that those cuts must be accompanied by a bit more revenues (i.e. taxes) to balance the pain. We will eventually get there.

 

[HawkeyeNFO]

The current interest rate environment has resulted in a huge transfer of wealth from savers (called old people) to borrowers (called young people). These things work both ways.

Not necessarily. Depends where you park your savings, and also what you do with your borrowed money.

 

[Marc]

I joined AARP for the benefits; not their politics. The two periodicals are a nice addition too. When they send me a survey; I fill it in the opposite of how they want. When they send an email; I reply with the reverse of what they want.

AARP isn't as much a lobbyist for seniors as they are probably the largest insurance broker in the world.

Marc

 

[Huston55]

As for a social security solution, I expect that a blended solution will eventually be enacted - raising the cap on earnings, chain CPI, a very modest 25bpts split between employer/employee, and a raise in the retirement age ranging from 1 month up to 2 years depending on your year of birth. Nobody will be happy yet both political parties will claim victory.

I agree that a blended and gradually implemented solution is the optimum approach. I'd like to think that it's also likely but, logic and rational thought don't seem to drive much of what happens in DC.

Those solutions seem to be a sensible place to start discussions to me, but each side is so entrenched I don't have much hope that something sensible like you outline would actually be enacted. Unfortunately IMO the politicians lack the courage to try to do the right thing for the country and most of the people. I hope that I am wrong.

Unfortunately, I think you're right (see above).

 

[photoguy]

The current interest rate environment has resulted in a huge transfer of wealth from savers (called old people) to borrowers (called young people). These things work both ways.

It's not clear to me that young people benefit from low interest rates. The major areas where they take on debt would be housing & student loans, but the low interest rates may have just fueled higher prices.

 

[ERhoosier]

AARP isn't as much a lobbyist for seniors as they are probably the largest insurance broker in the world.

+1

For better understand of most issues, just follow the money

 

[chasesfish]

The whole notion of SS benefits being sacrosanct is why I refused to renew my membership in AARP last November. Their answer only seems to be to raise SS taxes because according to them their surveys tell them that's what people want. Bull-youknowwhat. I think the solution needs to allow all options to be on the table, not just increasing taxes.

Isn't that the answer for every interest group? Vote and protect your benefits while asking someone else to pay for it.

 

[chasesfish]

Not necessarily. Depends where you park your savings, and also what you do with your borrowed money.

+1.

There is a wealth transfer, but you forgot the government is playing intermediary. The Federal Reserve buys $86bil in government issued debt a moth, artificially keeping long term rates low. They then price-fix short term lending rates. The only place for savers is assets that benefit from excess liquidity, like stocks and income producing real estate.

The government has also created substantial excess capacity in the banking industry keeping rates low for borrowers. The government now issues almost all mortgage and student loan debt, while requiring banks to keep more capital than they can deploy.


It's a tangled web that I'm not sure can be unwound easily. We are robbing our conservative elderly savers and forcing them to take risk.

 

[Midpack]

+1.

There is a wealth transfer, but you forgot the government is playing intermediary. The Federal Reserve buys $86bil in government issued debt a moth, artificially keeping long term rates low. They then price-fix short term lending rates. The only place for savers is assets that benefit from excess liquidity, like stocks and income producing real estate.

The government has also created substantial excess capacity in the banking industry keeping rates low for borrowers. The government now issues almost all mortgage and student loan debt, while requiring banks to keep more capital than they can deploy.


It's a tangled web that I'm not sure can be unwound easily. We are robbing our conservative elderly savers and forcing them to take risk.

Good points. Raising interest rates by whatever means isn't purely beneficial to elderly/savers either, it's not that simple. Higher interest rates have a downside for the economy, and the elderly aren't immune that outcome. Tangled web is right...

 

[robls]

Maybe There Is Hope? in [Market-Ticker]

Now if we can just get the people to focus on the medical issue like a laser, and take the entire industry, place it in the middle of the road, run it over with a bus and then back up and make damn sure you got it with the tires at least twice we could solve this problem.
I mean literally solve the budget problem.
For real.
Permanently.
That this is not the issue in both House and Senate is a national disgrace.

 

[braumeister]

When they send me a survey; I fill it in the opposite of how they want. When they send an email; I reply with the reverse of what they want.

I'm fairly sure they couldn't care less how people answer their surveys. That's not what they're about...

AARP isn't as much a lobbyist for seniors as they are probably the largest insurance broker in the world.

... as you already know.

 

[Stanley]

As for a social security solution, I expect that a blended solution will eventually be enacted - raising the cap on earnings, chain CPI, a very modest 25bpts split between employer/employee, and a raise in the retirement age ranging from 1 month up to 2 years depending on your year of birth. Nobody will be happy yet both political parties will claim victory.

It may not even be that difficult. I heard an interview with Simpson of Simpson-Bowles. If I remember correctly, he said that gradually raising the full benefit age by two years over the next 40 years, and then another one year over another 20 years, would keep SS properly funded. So 60 years from now we end up with a normal SS retirement age of 69. Beware all you nine year olds!!

 

[HFWR]

[-]that this is not the issue in [/-]both house and senate [-]is[/-] are a national disgrace.

fify ;d

 

[Alan]

It may not even be that difficult. I heard an interview with Simpson of Simpson-Bowles. If I remember correctly, he said that gradually raising the full benefit age by two years over the next 40 years, and then another one year over another 20 years, would keep SS properly funded. So 60 years from now we end up with a normal SS retirement age of 69. Beware all you nine year olds!!

... and he said that they would keep the option to take SS early at age 62.

 

[NanoSour]

Meanwhile, back in the corporate boardrooms of America, corporations are devising more and more elaborate ways to avoid paying corporate income tax leading to the "theoretical" SS crisis. And every other government spending crisis.