Fun With Robert Samuelson

It's always fun to read Robert Samuelson's column on Monday morning to see what silliness he is pushing to justify cuts to Social Security and Medicare. Today he has his plan for balancing the budget over the next decade (the country's most important problem for people who never heard about unemployment).

As part of his argument for cutting benefits for the elderly Samuelson tells us that, "in 2008, the median net worth of married elderly couples was $385,000." (Actually, if we check his source, it looks like the year is 2007.)

Okay boys and girls, can anyone think of anything that might have affected the net worth of the elderly between 2007 and today? Apparently no one at the Post has noticed anything or they might have suggested that Samuelson try to use more recent data in his column.

Naturally, Samuelson doesn't suggest doing anything about the real cause of his deficit crisis story, exploding private sector health care costs. Nor does he consider any measures that might hurt the Wall Street folks that helped inflate the housing bubble that wrecked the economy. But who would expect more from Samuelson or Fox on 15th Street?

Even at a net worth of $385,000 . . .
written by Carolyn Kay, August 15, 2011 6:55 AM

. . . and even if we assume it's all investible (it probably isn't, because much of it is most likely equity in a home), at 1% interest rates the income from all that wealth would be $3,850 a year.

Could Samuelson live on that?

Carolyn Kay
MakeThemAccountable.com

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written by Jim In Panama, August 15, 2011 11:04 AM

I would say their net worth must actually be even greater now than in 2007. Since they lost their savings in the market and have seen no increase in Social Security for the past 3 years, they've had to cut back on food. Switching to a low cost fast food diet has probably saved them quite a bit of money, thereby increasing their net worth. If we kill Social Security and Medi-Care all together they'll have to start growing their own food, thereby increasing their net worth even further through virtually eliminating the cost of eating. Why the Lefties can't see this is quite frustrating. Glad Rick Perry is running now, at least he understands REAL economics

-1

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written by PeonInChief, August 15, 2011 11:45 AM

The problem with this is that he's analyzing the net worth of the generation preceding the boomers. The earliest boomers didn't reach 65 until 2010, so the boomer retirees at this point are either too sick to work or people who have scads of money or a good pension. And a large part of the preceding generation's wealth is in their houses.

Well, duh
written by Sarah, August 15, 2011 1:13 PM

Limiting discussion to MARRIED retirees, of course, automatically skews the data towards the younger and wealthier retirees. The older they get, the more likely they are to be widowers- or more commonly- widows. They will be suffering from the loss of a second Social Security check, may have spent a significant fraction of their accumulated wealth on the spouse's final illness, and are more likely to be in fragile health and in need of expensive care themselves.

Robert Samuelson makes incredibly stupid mistakes, but in this case I suspect 'wily like a fox', rather than real stupidity.

Well whoop ti doo
written by Lord, August 15, 2011 2:12 PM

That would be enough to safely provide $15k in annual income, or about $19k over retirement. That had better not be their only source of income.

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written by jhand, August 15, 2011 6:04 PM

Assuming Sammy is right (a dangerous assumption, I know), then he ought to join Robert Wagner and Fred Thompson and sell all of us pensioners that cure-all—THE REVERSE MORTGAGE!!! Imagine how quickly Wagner's, Thompson's, and Sammy's puppet masters could suck up that $385,000. In no time at all, I'll bet.

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written by bmz, August 16, 2011 1:18 PM

What Samuelson conveniently ignores is that those elderly who try to supplement their SS with their own income, pay far and away the highest marginal income taxes on that income. I am 70 years of age, and am self-employed part time. My AGI is ~$54,000/yr. At that income, I must pay, in addition to my regular tax, a tax on 85% of my SS benefits( for every marginal dollar of income, I pay a tax on $1.85). My total marginal income tax rate is: 25%(regular rate) +21.3%(85% on SS) +12.4%(self-employment tax) +7.5%(state income tax) = 66.2% total marginal income tax rate.

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