Solving Social Security

In Monday’s New York Times, economist Paul Krugman had an interesting piece — “Attacking Social Security” — in which he defended Social Security, even as it has come under attack by both Republicans and Democrats. His first argument is that the “claims of crisis” are the result of “bad-faith accounting.”

“In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count — because hey, the program doesn’t have any independent existence; it’s just part of the general federal budget — while future Social Security deficits are unacceptable — because hey, the program has to stand on its own.”

His second point is that raising the retirement age to 70 (It’s already gone from 65 to 66 and is scheduled to rise to 67) might make sense for white collar workers (“the people who need Social Security the least”), but for the rest of America, the prospects of manual labor until age 70 may be a matter of life and death. Moreover, although “life expectancy at age 65 has risen a lot at the top of the income distribution,” lower-income workers have not seen the same rise. In other words, the changes being proposed to Social Security are likely to eliminate benefits for those who need them the most.