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Home Publications Blogs Beat the Press Balance at the Washington Post (a.k.a. Fox on 15th Street): Conservatives Tell Liberals Why They Should Support Cuts to Social Security

Balance at the Washington Post (a.k.a. Fox on 15th Street): Conservatives Tell Liberals Why They Should Support Cuts to Social Security

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Wednesday, 23 March 2011 07:01

Showing the sort of balanced journalism that we have come to expect from the Washington Post, its oped page featured a column by Robert Pozen, a financial industry executive and proponent of Social Security privatization, telling liberals why they should support cuts to Social Security. The gist of Mr. Pozen's argument is that Social Security is becoming less progressive over time because the gap in life expectancies between higher paid workers and lower paid workers is growing.

Furthermore, because of growing wage inequality, a larger share of wage income is escaping the Social Security tax. In addition, Pozen tells us that the structure of retirement income subsidies is highly regressive since the bulk of the tax benefits go to high income earners.

So, how do we fix the situation? Maybe improve health care for the bottom half of wage earners (other countries don't have the same gap as the United States)? Nope, Mr. Pozen doesn't want that to be on the agenda of liberals.

Maybe we should try to restructure the economy to reverse the policies that have led to the upward redistribution of wage income over the last three decades. Nope, Mr. Pozen doesn't want that to be on the agenda of liberals.

Maybe we should reverse the structure of retirement saving subsidies so that this is more progressive. Nope, Mr. Pozen doesn't want that to be on the agenda of liberals.

How about raising the cap for the wages subject to the Social Security tax. No, Mr. Pozen tells us that Congress won't do that.

No, the best way that Mr. Pozen can think of for making Social Security more progressive is by cutting benefits for people earning $40,000 a year and higher. Yes, this has been the big problem the country is facing. School teachers, construction workers, and office clerks are getting too much money. We better take away their Social Security benefits so we can make this a fairer society. All good liberals would agree with that.

Remember you can read this only in the Washington Post.


Comments (15)Add Comment
A real poser
written by Fempus Tugit, March 23, 2011 9:00
One can only wonder at the disingenuousness of self-serving executives as Mr. Pozen, posin' as a protector of the public good. As if he and his colleagues haven't gouged me enough, they now want to take away what I've actually paid for? This is the best that the vaunted conservative intellectiual "rigor" can come up with, sadly. But then, this is the type of economic fantasy porn one learns to expect from the Post.
Stupid Liberals: Be Careful What You Ask For - You May Get It
written by izzatzo, March 23, 2011 9:21
Any economist knows it's a stretch for non-economists to understand how overwhelming forces of self interest undermine progressive policies and cause them to backfire into regressive outcomes.

Also known as the Poven Paradox, this was proven in a famous game theory experiment in which ten wealthy people were each given a gun and twenty thousand dollars, then asked to save ten wage earners from unintended outcomes of flawed progressive policies in any way they choose.

After the experiment, the ten wealthy participants kept the money and produced uncoerced affadavits signed by the deceased wage earners to verify they were better off dead than to pursue progressive policies that would just backfire anyway.
SS Taxation
written by bakho, March 23, 2011 10:09
Doesn't the taxation of SS benefits to high income earners increase the progressivity somewhat? Maybe we need to increase taxes on SS benefits to high income earners. That would make it more progressive and function more like insurance. If someone lost other income sources, they would not pay the tax.
Teachers & Social Security
written by JJF, March 23, 2011 12:46
"School teachers, construction workers, and office clerks are getting too much money. We better take away their Social Security benefits so we can make this a fairer society."

For the record, school teachers (in many cases, at least) do not receive Social Security benefits. For example: my wife is a teacher and pays into the California State Teachers' Retirement System (CalSTRS), not Social Security. On the other hand, some teachers in California participate in CalPERS and do pay SS taxes. But I believe teachers in a lot of states participate in plans outside Social Security.

That point aside, the idea that SS benefits need to be cut now is very wrong-headed.
convice the conservatives
written by chabuka, March 23, 2011 1:38
that the economic "fix" is to tax the people who are not paying taxes, especially the top 1.5 percent...those who make less than 106,000 a year are the only people who pay into social security any way....we HAVE paid for social secuirty ..we are entitled...those poor teachers, fire-fighters, police, etc. who paid into state pensions (those pension were stolen by Wall Street (are also entitled!) and they need to go to Wall Street...and TAKE their money back
right past the snooze alarm
written by Howlin Wolfe, March 23, 2011 2:08
Stupid Liberals: Be Careful What You Ask For - You May Get It
written by izzatzo, March 23, 2011 8:21 AM

Any economist knows it's a stretch for non-economists to understand how overwhelming forces ... ZZZZZZzzzzzzzzz
A Look at Social Security
written by Tony, March 23, 2011 4:15
Maybe we should adjust social security sooner rather then later, by making smaller changes now, rather then wait until 2037 (the current estimate when it will no longer be able to pay full benefits). We are now withdrawing more out of social security, then we are bringing in, at a time that we have huge budget deficits. Granted, we knew this day was coming, but it came at a very bad time. Maybe, just maybe, if we make small changes now, that would be better then making larger changes later on. And maybe, just maybe, we will have to means test people collecting there social security. Some have suggested that anyone with a million dollars in liquid assets when they retire, will be means tested out of social security. That may seem unfair, but a lot of sacrifices are going to have to be made in my opinion, to get our house back in order.
...
written by vorpal, March 23, 2011 4:22
Tony, you wouldn't be a product of persona management software would you?
To Vorpal
written by Tony, March 23, 2011 7:19
I have never heard of persona management software.
Robert Pozen - Another of the Wealthy Ignorati
written by Hugh Sansom, March 23, 2011 7:50
I'm waiting to hear anyone making less than $150,000 per year advocate anything remotely resembling what Pozen, Summers, Obama, Bush, Cheney, Blankfein, and so on advocate.

Here's a thought: Tie the compensation of elected officials in the executive and legislative branches to the wage and wage growth of the median American wage earner. The total compensation (including value of gifts, speaking fees, etc.) of a member of Congress can be no more than 3 times that of the median American earner and the growth in that compensation can only be as great as the growth in median income. Tie their health care to ours, too.

As for the Pozens of America ... Thomas Jefferson had the right idea.
Ah, grasshopper, izzatzo, you have so few moons left to master your craft ...
written by Fempus Tugit, March 23, 2011 8:41

Any normal person knows it's a stretch for izzatzo to understand how overwhelming forces of self interest undermine conservative policies and cause them to backfire into destructive outcomes.

His patron saint, Millstone Unfreedman, condoned unrestrained avarice and look where it got us: $80 trillion in the hole. Show me a progressive policy that cost that much. What? You can't come up with one?
Mean- testing SS gets you nothing and any reporter who doesn't know this needs a new job
written by Dean, March 23, 2011 10:20
This one is simple -- there are not enough rich people, therefore means testing doesn't get you anything. Peter Peterson says nonsense about means testing, but every reporter for a serious news outlet should know better http://www.cepr.net/index.php/...ns-testing
...
written by S.D. Jeffries, March 23, 2011 10:24
It's going to take torches and pitchforks (and maybe even tar and feathers) to get these people out of their rarified lifestyles and shatter their fantasized world. Splitting those over fifty from younger workers is an underhanded and cynical ploy, but we "regular folks" of all ages had better hang together or we will certainly hang separately.
Means testing will help (a Little)
written by Tony, March 24, 2011 6:24
Surveys vary quite a bit on how many millionaires there are in America. It's probably is between one to two percent of the population. Means testing them out of social security will help. It will not make a big difference, and it may be unfair, but it will help.
Taxes on SS benefits fetched $19.9 billion, as I 'm sure you know.
written by AndrewDover, March 24, 2011 7:57
Dean's argument in the paper that the costs would approach the administrative costs of the Disability portion of SS is a red herring.

The OASI trust fund collected 19.9 billion dollars in taxes on SS benefits in 2009. That could easily be increased by $3 billion just by changing the tax forms.

It may not be enough to bring SS into actuarial balance, but it still should be done. The same reasoning applies to letting the Bush tax cuts expire. It would not have solved the federal budget deficits, but it would have helped.


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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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