• Henry Aaron responds

    In response to my post, by email Henry Aaron wrote,

    [M]y intent was not to argue that liberals should support some entitlement “reform” (which means “cuts”), but rather to argue that they should think seriously about what sorts of cuts they could live with, as real-world negotiations will eventually compel them to accept some cuts.

    There is a difference between being a negotiator and being an analyst. I was writing as an analyst and asking what changes negotiators should be willing to be pushed into if they have to give ground. Were I a negotiator, I would start with the position that the right thing to do with Social Security is to raise the payroll tax one way or another and add marginally to benefits for the very old—no cuts! And, for Medicare, there is a host of structural changes that could improve the program; I actually would put up little resistance to some increase in SMI premiums above, say, $50/100K, as I don’t really see why providing subsidies that deep for people with adequate incomes is a good use of public funds.

    The distinction I am drawing is similar to what a general would do who was trying to hold a position. As a commander (negotiator), he would set up his forces to hold it, but he would also (as analyst) be thinking about lines of retreat if needed and might be preparing second lines of defense.

    The one area where I do think that ‘we’ are holding an ultimately indefensible position is that no matter how much longevity goes up, people should continue to get benefits at the same age. The currently unequal distribution of those longevity gains means that we have to proceed very, very carefully in order not to do lots of harm to the many who still have to get out of the labor force for good and sufficient reasons at early ages. But the general stance, it seems to me, should be to send the message that the norm for those who can do it is to work until later than 64 for men and 62 for women, the ages at which the median man and woman are now out of the labor force.

    Henry authorized my posting of his message.


    • To some extent, we already do support those who have to leave the workforce at an early age through the disability channels. These are far from perfect and almost everyone knows of a case where the system has been abused. A smaller number of us are aware of cases where disability was not acknowledged or, if it was acknowledged then no benefits were available because the disabled person had spent many years out of the workforce as a stay-at-home parent or other caregiver and doesn’t have enough work credits to qualify. One person with MS gets disability while another doesn’t.

    • I had read somewhere that in France manual workers were eligible for retirement earlier than other workers and I found this:

      This trend may depress you, but consider the upside. The economist Josef Zweimuller, at the University of Zurich, recently co-authored a study which found that early retirement, as much as we may crave it, seems to be bad for our health:

      “[A]mong blue-collar workers, we see that workers who retire earlier have a higher mortality rates and these effects are pretty large.”

      Here is a mention of manual workers retiring earlier that others in France.

      I was going to say we could just raise the age for non manual workers but the preceding article is making me rethink that.

    • I REALLY LIKE YOUR BLOG! Keep up the great work!!

      Common Cents