Ruth Marcus is on the warpath again arguing that those who don't want to jump in line on the SS crisis train are bing irresponsible. Read it and weep. A couple of quick points are in order. To claim unanimity of forecasts agree with SS trustees is simply false. The trustees assume that productivity growth will be markedly slower over the longterm horizon than its post-war average. They also assume that immigration will slow sharply from its rate over the last decade. Both assumptions make the projections for the program look considerably worse. One need only step over to the non-partisan Congressional Budget Office's website to find more positive projections on these variables. [I have been corrected on one of these points. Apparently CBO also assumes that the rate of immigration will fall when the baby boom generation retirees.] The second key point to keep in mind is that the idea that taking steps earlier rather than later makes things easier means that it is better to either raise taxes on a cohort that has seen 30 years of wage stagnation or to cut their retirement benefits, even though most have accumulated little for retirement other than their SS. Even the trustees project that the typical worker will have a wage that is about 35 percent higher in 2040 than what workers earn today. Only the Post would argue that it's better to raise taxes and/or cut benefits on much poorer workers today than to risk the possibility that we may have to raise taxes or cut benefits on the much wealthier workers of the future in order to cover the greater cost of their own retirement (they are projected to live longer also -- that's the real problem. We're so cruel to our children.)
--Dean Baker
