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Home Publications Blogs Beat the Press Bill Keller Wants to Take Away Your Social Security and Is Either Too Ignorant or Dishonest to Acknowledge that He Is Not a Typical Baby Boomer

Bill Keller Wants to Take Away Your Social Security and Is Either Too Ignorant or Dishonest to Acknowledge that He Is Not a Typical Baby Boomer

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Sunday, 29 July 2012 21:02

The effort by the rich to take away Social Security keeps building momentum. Today Bill Keller urges his fellow baby boomers:

"FELLOW boomers, we have done more than our share to make this mess. It’s not our fault that there are a lot of us, but we have resisted any move to fix the system. We should make a sensible reform of entitlements our generation’s cause. We should stiffen the spines of our politicians, and push lobby groups like A.A.R.P. to climb out of the bunker and lead."

"Lead" in this context means supporting cuts to Social Security and Medicare. That is really brave for Mr. Keller to stand up and call for sacrifice from his age cohort. Does Keller know that the typical near retiree has total wealth of $170,000. This includes everything in their 401(k), all their other financial assets and the equity in their homes. Another way to put this is that the typical near retiree (between the ages of 55-64) could take all their wealth and pay off their mortgage. After that they would be entirely dependent on their Social Security to cover all their living costs.

Does this situation describe Mr. Keller's finances? My guess is that it doesn't. If that is true, how does Keller claim to speak for people who are in a hugely different financial situation than him? Is he really that ignorant of the issues that the NYT gives him a column to write about or is he dishonest? Readers will have to debate that in the months and years ahead.

This is not the only place in the piece where Keller lets ignorance and/or dishonesty get the better of him. At one point he calls for a change in the indexation formula for Social Security's cost of living adjustment that would be the equivalent of a 3.0 percent across the board cut in benefits. (We know, got to do something about those high living seniors.)

Keller describes this 3.0 percent cut in Social Security benefits as:

"They also include technical fixes like aligning the automatic cost-of-living formula with reality."

Is that right? Has Keller studied the cost-of-living for the elderly? Did he evaluate the Bureau of Labor Statistics elderly index, which generally shows that senior citizens experience a higher rate of inflation than the index used for making the annual cost of living adjustment for Social Security.

If he did, he shows zero evidence of this fact in his piece. It sure sounds like he is just repeating pablum that passed for wisdom in Washington elite circles, but rightly gets ridiculed everywhere else.

While Keller appeals to arithmetic it is not on his side. The arithmetic says that we have no problem affording the projected increase in retirees, just as we were able to afford a sharp reduction in the ratio of workers or retirees over the last decade.

The problems result from the fact that we have a broken health care system that causes us to pay more than twice as much per person for our health care as people in other wealthy country. But fixing the health care system would likely mean lower payments to insurers, hospitals, drug companies and doctors.

The other problem is the sharp upward redistribution of income over the last three decades. This has meant less money for middle income families and also less money for programs like Social Security and Medicare.

These problems can be fixed but that would require Mr. Keller to appeal to his fellow one percenters, not his fellow baby boomers. He probably doesn't have the courage or integrity to do that.

Comments (21)Add Comment
...
written by urban legend, July 29, 2012 9:48
What a ****** jerk! It's as simple as that when someone is as deliberately obtuse as he is. There's no place for civility.
I read somewhere a while back
written by Brett, July 29, 2012 10:31
Keller was making somewhere near $700,000 a year as the executive editor. This is not someone who would find cuts to Medicare or Social Security discomforting as he is so fabulously wealthy that he doesnt need those programs. Yet he still fancies himself brave for asking for cuts.
Keller = Corporate Brat
written by Hugh Sansom, July 29, 2012 10:47
Bill Keller is the son of the late chairman and CEO of Chevron oil corporation (which might also explain rumors of longstanding Times editorial hostility to issues of fossil fuel burning being a chief causal element in climate change).
The Three Big Cs': Credibility, Courage, Charade
written by James, July 30, 2012 1:08

To create a false sense of credibility, it's often the so-called affuluent babyboomers who themselves calling for self-sacrifice by forgoing or willing to take some kind of hair-cut to SS & Medicare.

As many here have observed: these people don't really need them.


Using the same pathetic agruments made against Buffet, these folks like Simpson, Keller, Samuleson, Peterson, etc., could easily send their SS checks or whatever benefits in a check back to the gov't.

Since they have so much courage and willing to sacrifice, they should also pay more taxes than they are legally required to then (just like Bishop Romney has always insisted: I have always paid what was required of me BC I WAS ABLE TO OFFSHORE ALL MY EARNINGS ASSETS SO MINIMAL LEGAL TAX OBLIGATIONS)

Don't blame me for paying less just bc I can sheild them and you cannot.

So MAN UP - you love this country so much and asking others to sacrifice along with you to take lower SS & Medicare - send back the benefits and pay more taxes.
Pathetic suggestions to fix healthcare
written by Robert Salzberg, July 30, 2012 5:53
Keller also wrote:

   "To curtail the raging inflation of health costs, the government could better use its market clout to hasten electronic record-keeping, replace the fee-for-service model, reform medical malpractice laws and promote living wills."

    I guess Keller don't know much about the ACA which had a chunk of money in subsidies to help medical practices convert to electronic records.  The money in the ACA to pay for physicians to discuss end of life issues, much more vital than a living will, was labeled 'death panels' and stripped from the legislation. Funds to develop experiments with medical malpractice reform are also included in the ACA.

     The ACA also has funding to promote experimentation with alternatives to the fee for service model in our great laboratory that we call the 50 states.  Mostly rural vs. mostly urban settings naturally have very different problems with health care delivery and the best solutions will be multiple.  For instance, the idea of a 'medical home' where you get all your health services in one place is great in densely populated areas but it is impossible to have that model in tiny towns that are hundreds of miles apart. For rural areas, medicine needs to go out to the people with traveling groups like medical fairs and use of new technology like tele-health where a patient has equipment in their home that monitors their weight, blood pressure, temperature, oxygen saturation, heart rate and blood sugar levels and transmits them electronically to their doctor or the ability to use Skype to do real time visual monitoring at a distance for wound care and patient education. You need reliable high speed broadband to do that which is sorely lacking in rural areas.  Another area that President Obama has both pushed to fix and secured funds to promote.

    It's also pathetic that Keller talks about using market clout without mentioning prescription drug prices.
Keller Advances Signature Failure of Austerians: Firemen Who Never Put Out Fires
written by Last Mover, July 30, 2012 6:42
As another sock puppet for Austerians, Keller raises the stale warning of a false economic fire that must be extinguished on the backs of boomers, even as the real fire - unemployment and the output gap - rages on to create massive economic waste that is totally avoidable.

Keller and the Austerians have no intention of putting out real fires. They're too busy avoiding artificial fires of inflation and excess debt on behalf of the wealthy they've predicted for the long run that never occur.

If Keller was a real fireman, he would spend all his time scolding residents with lectures on improper fire prevention while ignoring buildings burning down around him.

To paraphrase Keynes, if fires in the short run are not extinguished, the long run doesn't matter.
affordable entitlements
written by Jane Flemming, July 30, 2012 7:20
This is actually a question. Part of your solution to affordable entitlements going forward (we don't call them entitlements in Canada) is increasing productivity, which I guess you are projecting based on past performance, but what if productivity doesn't increase? You have had admirable increases in productivity in the US over the past twenty years, but apparently we haven't in Canada. I know this, because we're beaten about the head with our poor productivity performance all the time in newspapers like the Globe and Mail. We're having a big argument in Canada at the moment about whether our high "petro" dollar is hurting our manufacturing sector. Our exports have benefitted greatly from our low dollar for years. My question is, could having a low dollar ultimately hurt productivity, because you can use a low dollar to keep your exports up, instead of being more productive.
Self-Sustaining Government
written by Ron Alley, July 30, 2012 7:58
I was struck by Keller's failure to understand the problem he describes. We need a model for government that provides self-sustaining financing for the activities government performs. Oh, to be certain, that means running deficits in today's economy as well as surpluses once we return to a more nearly "normal" economy. We can't pretend that fiat money is the long-term solution that enables us to finance our government with the Republican model of cutting taxes while borrowing and spending.

What we need is a frank discussion of financing government. We need a plan to bring revenue and spending into better balance. By balance I mean that we need to preserve the spending that meets our needs and to raise enough revenue to meet those needs. That also entails a discussion of reforming government's footprint on the economy.

While Keller and Bowles personify the big oil - big bank axis, their views and plans reflect government's footprint on the economy. The first auto emissions standards dealt with the percentages of emissions rather than the weight of emissions per mile driven. The accompanying fuel efficiency standards were too low. The result has been an increasing demand for oil. The strong dollar and financial bubbles of the Clinton and Bush administrations served the interests of big banks and big oil, while hollowing our economy. These are the so-called bipartisan initiatives of the Corporate Part of America.
...
written by wkj, July 30, 2012 8:09
Another sign of Keller's ignorance is his reference to the dramatic growth of Social Security benefits as a % of federal outlays without referring to the corresponding growth of FICA tax revenues and the virtual disappearance of other, more progressive, revenue sources, such as corporate income and estate taxes.
...
written by John, July 30, 2012 8:37
If your wealth is in home equity, you can't take it to pay off the first mortgage without taking out a second mortgage! Sure, someone who has $170k in financial assets and lives in a home with no equity but a $170k mortgage could cash out and pay off his mortgage. But with mortgage interest rates under 4%, why on earth would someone do that? The right this to do right now is to refinance into the largest mortgage you can at under 4%, and put all your net worth into the stock market, which as Dean keeps pointing out, is currently at an attractive P/E.

"Does Keller know that the typical near retiree has total wealth of $170,000. This includes everything in their 401(k), all their other financial assets and the equity in their homes. Another way to put this is that the typical near retiree (between the ages of 55-64) could take all their wealth and pay off their mortgage. After that they would be entirely dependent on their Social Security to cover all their living costs."

...
written by Eclectic Obsrvr, July 30, 2012 10:36
Apparently, so called media liberals are mostly social issues liberals and have no sense other than "conventional wisdom" of progressive economic policy.
...
written by PeonInChief, July 30, 2012 10:37
As I recall, the boomers were the people who prepaid their Social Security benefits, which enabled Bill Keller to avoid paying his fair share of taxes for 30 years or so. It's time for him and his fellow 1% to pingle up.
...
written by sherparick , July 30, 2012 11:37
I went on the comments to this column and decided to put a little factual content into Bill Keller's fact-free column, not that I expect it will matter since he and his class of VSPs just know what the story is. Also, it should never be forgotten who the Kellers and Fred Hiatt's of the world socialize with and every dinner party hedge fund managers and CEOs are telling him how terrible the deficit is and how unaffordable and an out of date Social Security is. And these guys would not try to con him right, they are his "friends." I put three things into the comments that are never mentioned in these "social security must be cut" if you are a patriot pieces. One was to remind folks that the avearage social security benefit is approixmately $1221 a month, second, to point out that the retirement age is already going up based on the 1983 deal which was suppose to "fix" social security. And third, as part of that same deal, working class boomer paid an extra $2.5 trillion in social security taxes over the last 30 years to pay for social security for the baby boom generation. But somehow, these are the bonds that the rentier class does not mind hair cutting.
Slipping Dean...Keller also mentioned your favorite: THE Bowls Simpson Report
written by pete, July 30, 2012 12:03
Maybe you've beaten that horse too often....
...
written by crosspalms, July 30, 2012 1:53
Here’s my idea for “fixing” Social Security. Lower the retirement age, increase the benefits and pay for it by raising the amount I pay in payroll taxes (especially if “I” make more than the current cap). With the disappearance of private, defined-benefit pensions, the rising cost of health care, the periodic “oops, sorry about that” immolation of IRAs and 401(k)s invested in stocks, it makes sense for a safety net to actually provide some safety. And with unemployment so high, why not make it more attractive to get some oldsters like me (I’m 62) out of the job market and make room for people my daughter’s age? Wikipedia tells me Keller is 9 months older than me. Let’s get him out of the job market, too, and turn the column over to someone my daughter’s age who won’t sound like such an entitled fathead.
rarely cited point of reference
written by bob somerby, July 30, 2012 5:05
Keller's father, George Keller, retired as CEO of Chevron.
@sherparick - good try - hope it passed the censors...
written by A Populist, July 31, 2012 12:58
I wrote two comments to Keller's column.

My first one was very pointed, saying:


(cut for length)
"He apparently thinks the $1200 typical monthly Social Security benefit is too much of an "Entitlement", and needs to be cut..
()
"He uses the faulty Demographics argument, which fails to take into account the continuing increases in productivity, which more than compensates for the higher ratio of retirees to workers, while also failing to account for lower numbers of non-working children to support.

The "common wisdom" is that we should raise the retirement age, even while the elderly already can't get jobs.  This just shifts workers from SS to UI, or the gutter.

How about the US wasting 20% of health care dollars to inefficient private insurance?  What about the waste of paying for 25% of the world's prisoners with only 5% of the world population?  How about reduced military spending?  How about reducing spending on our excessive government spying on it's own citizens?

Increases in productivity must be shared - by increasing wages at the low end.  If this is done, there will be no "demographic cliff".  If wages at the low end remain unsustainably low, the working class can never pay for their own retirement, or supply the Demand needed to make the economy grow."

It never posted. I hope yours posted. No one but Dean seems to be making the argument about increasing productivity and fewer children offsetting the "Impending Demographic Doom", which needs to be made more often.

Also, concrete sarcastic remarks like: "He thinks the typical $1200 per month SS payment is too high, and needs to be cut." - would seem to be very effective and persuasive, because they make it obvious that SS payments are by no means generous. It is much easier for guys like Keller to talk about cutting SS when it is abstract, and they can get away with characterizing people that are really just scraping by (on benefits they PAID for) as "spoiled brats with a sense of entitlement". - Which is why I think they scrubbed my comment.


Your wealth data does not include defined benefit plans
written by AndrewDover, July 31, 2012 7:31
So the median family net worth was $179 thousand dollars in 2010 for those aged 55-64. (See table 4, page 17)

But that does not include their non social security pension.

"Two common and often particularly important types of retirement plans are not included in the assets described in this section: Social Security (the federally funded Old-Age and Survivors’ Insurance program (OASI)) and employer-sponsored defined-benefit plans.
...
In 2010, 55.1 percent of families had rights to some type of plan other than OASI through the current or past
work of either the family head or that person’s spouse or partner, below the 57.7 percent level in 2007."

http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.pdf

And seeing as those with defined pensions typically have less in 401K type plans, the median wealth would rise substantially if those annuities were converted to a lump sum.
Reply to Andrew Dover - I am one of the 55%.
written by A Populist, July 31, 2012 12:24
My wife has a pension from a former employer, so that makes our family one of the 55.1 percent with a pension.  It totals around $130 per month.

Yes, that will help a little, but a median monthly pension per person would be a much more useful figure, in determining how much extra retirement income the typical person has, due to pensions.  And I would bet both the percentage, and median pension dollar numbers will continue to drop.  The 55.1% number is a useful way to confuse the issue, and help the wealthy delude themselves that middle class and working class retirees are living too high off the hog.  The stuff spewing from Keller and the rest of the DC bubble class, makes it clear that they are all of the mindset that they can just cut, cut, steal the people's SS, and it just means those retirees will have to buy a BMW instead of a Porsche.   They really have no clue what it is like for the working class.
Typical Pension Income is About $175 a Month
written by Dean, August 01, 2012 4:02
A. Populist,

it sounds like you wife's pension is pretty typical. According to this analysis by the Employee Benefit Research Institute [http://facts.kff.org/chart.aspx?cb=58&sctn=162&ch=1725], pension income for retirees averages about 1/7th as much as Social Security for families in the middle quintile. Given that SS is about $1,200 a month, that comes to around $175 a month.
Comparison of median pension incomes
written by AndrewDover, August 01, 2012 10:15

Median pension income of 65+ recipient units is $12,000, for those who have pensions, says "Income from Pensions", Section 6.A3 from

http://www.socialsecurity.gov/policy/docs/statcomps/income_pop55/

That means 50% of retirees who have pensions have pension income above or below $1000 a month.

If you define typical as the median value of income from a pension that includes all the people who don't have a pension, then of course you will get a number close to 0.
But if you are comparing pensions, it makes more sense to compare $175 a month with the median pension income of people who have pensions.

Median income for units according to sources:
$17,957 Social Security only
$35,000 Private pension or annuity only
$35,253 Social Security and private pension only
$39,995 Social Security and federal pension only
$46,465 Government employee pension only

Source: "Total Money Income" Table 3.A5

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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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