Monday, January 19, 2009

We're still trying to guess where Obama is heading on social security.


Please!! We’re still trying to guess where Obama is heading on social security.

A blog by Harvard economics professor Greg Mankiw, with an entry Oct. 17, 2008, says that while Obama is comfortable with expanding the taxable wage base (over $25000), that will only fix about 15% of the problem. As of October, Obama was against raising the full retirement age or cutting benefits. The entry is here.

But an AP story by Libby Quaid suggests that Obama and Nancy Pelosi are “‘nsync” on social security reform and benefit cuts on those deemed to be able to afford them definitely is on the table. (How in the world do we answer something like that? How many assets is enough?) How soon any cuts would happen, no one can say. The link is here.

The old libertarian prediction that Social Security would return back to a politicized wealth redistribution and manipulation system, and not even pretend to be an annuity that a worker had the right to earn or count on, could be coming true. Forget the Ponzi scheme talk of Cato.

I’m a little surprised that I don’t see any hollering and screaming about Obama’s hints on social security and Medicare yet on the AARP website. (AARP does have this more general paper on Yahoo! on how to help retirees.) And I don’t see a recent paper by Cato on social security, but I would expected to hear plenty from the Org in the “ice palace” (or “Fortress of Solitude” on Massachusetts Ave.) by now. (Maybe they do expect Clark Kent to pay a visit. After all, he’s supposed to be a journalist now.)

As noted in the Jan. 16 entry, there’s only a frost-heaved, rutted dirt road now to kick Obama's metaphorical can on. It’s like driving into the Northwest Angle of Minnesota.

I remember those little skits of the servicemen at Fort Eustis back in 1969. “From each according to his ability, to each according to his needs.” We really made fun of that kind of thinking then.

Update: Jan 20

Economist.com has a piece Jan. 8 "The Right Crisis to Target?" Social Security and Medicare, it says, remain self-financing during the near-term future. The writer is surprised that Obama brought it up at all now. We could reduce benefits of those in the future "to escape the wrath of the AARP" or index retirement age to life-expectancy, as does Sweden now (that sounds like a better idea to me). The link is here.

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