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Home Publications Blogs Beat the Press Why Does the NYT Think It's So Cool To Beat Up on Seniors?

Why Does the NYT Think It's So Cool To Beat Up on Seniors?

Friday, 12 August 2011 06:58

The NYT decided to have a special dialogue around a letter to the editor that called on President Obama to take "decisive action" on the economy. Remarkably, only one item on the list of decisive actions, investing in infrastructure, would have any positive impact on jobs and even this would be limited. While investing in infrastructure is a very good idea, there are not very many people who can be usefully employed on infrastructure projects in the next two years.

It takes time to plan a project and many projects, like building high speed rail, are only going to be built over many years. This means that even the most aggressive infrastructure program will only have a limited impact on jobs in the rest of 2011, 2012, and even 2013. If we want to see substantial reductions in unemployment over the next two years we will need more decisive action than this.

The rest of the items in the letter all involve reducing the deficit. While some of the proposals are very reasonable, like ending the war in Afghanistan and raising taxes on the wealthy, these will certainly not help create jobs. The list also contains two profoundly silly proposals, means-testing Social Security and raising the age of Medicare eligibility to 67.

The idea of cutting Social Security is especially off-base since the latest projections from the Congressional Budget Office show that the program is fully funded through the year 2038 with no changes whatsoever. Even after this date, the program would always be able to pay more than 80 percent of scheduled benefits. Given the overall health of the program, proposals for cuts are effectively taking away benefits that people have already paid for. 

In addition to the fact that such cuts would be unnecessary and arguably unfair it also is worth noting that means-testing is an especially bad way to make cuts. While investment banker Peter Peterson likes to go around the country boasting that he doesn't need his Social Security, the reality is that there are very few rich elderly people like Mr. Peterson. In order to have any noticeable impact on the program's finances, a means-test would have to hit very middle income people -- people with incomes in the neighborhood of $40,000 a year.

Even then the impact would be very limited. To have a major impact on the program's expenses it would probably be necessary to move the means-test down to people with incomes around $30,000 a year. This would not fit most people's definition of rich.

The proposal to raise the age of Medicare eligibility is also incredibly misguided. It is extremely expensive for seniors to get health care insurance. Many workers struggle to stay on jobs until age 65 when they can first qualify for Medicare. This proposal would push the bar out two years. Those who lose their jobs or can't find jobs will generally not be able to afford insurance, which could easily exceed $20,000 a year for those with even minor pre-existing conditions.

Rather than looking to reduce benefits the more obvious way to go with Medicare is to reduce the cost of care. The United States pays more than twice as much per person for its health care as the average for other wealthy countries. If we could get our costs down to those of other countries we would be facing huge long-run budget surpluses, not deficits. One way to get lower costs would be to allow Medicare beneficiaries to buy into the more efficient health care systems in other countries. The enormous potential savings could be split between the government and the beneficiary.

It is perverse that the NYT thinks it is reasonable to have major cuts to programs that affect retirees or near retirees. These people were especially hard hit by the collapse of the housing bubble. Many of them saw most of their life's savings disappear as their house price plummeted. Insofar as we need revenue (which we clearly do not now), the most obvious place would be to tax the people who profited most from the bubble, the Wall Street crew.

A tax on financial speculation could easily raise more than $100 billion a year. Congress could also instruct the Federal Reserve Board to hold onto the $3 trillion in assets that it has acquired as part of its quantitative easing program. This could save the government more than $100 billion a year in interest payments later in the decade. In short, it is not difficult to find money for people who are not afraid of going after the rich and powerful.

Comments (23)Add Comment
written by skeptonomist, August 12, 2011 9:04
Another seemingly minor change in financial tax structure which could have major impact is reform of the capital-gains tax. To call a gain over 366 days "long-term" is ridiculous. Just raising this cut-off duration would not only increase revenue but change incentives away from speculation and towards beneficial long-term investment.
written by Jeffrey Stewart, August 12, 2011 10:01
A financial speculation tax is a great idea! How, exactly how, does Dean Baker propose that it become law?

The politicians aren't listening to the people. They'd be focusing on unemployment and not the deficit if they did.

So again, how, exactly how, do you propose a financial speculation tax becomes law?

written by tracy, August 12, 2011 10:13
"Insofar as we need revenue (which we clearly do not now)..." Did you mean, we do need revenue? You haven't joined the Tea Party, have you Dean?
I know your lead question was rhetorical, but...
written by diesel, August 12, 2011 12:40
The NYT thinks it's cool to beat up on seniors because it's easier than taking on the seemingly powerful. It takes courage to stand up to the powerful. It's far easier to join them in picking on the relatively weak. Standing up for the weak not only requires a certain sense of compassion but implies a broader gestalt-like perspective that realizes that the system as a whole cannot function without a harmonious relation between its parts.
Cut Bank storing interest rate at the Fed
written by jumpinjezebel, August 12, 2011 1:25
Today banks get interest from the Fed for storing their money at the Fed rather than putting it to work. Stop that and see how it helps!!!
written by PeonInChief, August 12, 2011 3:11
They think it's cool to beat up on seniors because they don't have to increase taxes on the rich to redeem the bonds that held taxes low and enabled them to speculate in puppy futures.
written by urban legend, August 12, 2011 3:48
Yes, we need immediate medicine to create (and save) jobs, but short-term $8/hour relief by itself will not create the confidence in future employment that major infrastructure projects will do.

A lot more than just putting more money in people's hands is necessary. The public knows that real estate construction and manufacturing jobs are gone for a generation, and it seems that only long-term infrastructure and other government-stimulated projects -- the needed but long-neglected projects that should have been employing millions for the last 30 years anyway -- offer a sector that can replace those well-paying jobs.

The public needs to know -- those under 30 in particular -- that the economic activity of the country can once again support full employment. Right now, it can't, and nobody is seriously offering the changes that will.
The working class
written by Scott ffolliott, August 12, 2011 4:08
"The working class and the employing class have nothing in common. There can be no peace so long as hunger and want are found among millions of the working people and the few, who make up the employing class, have all the good things of life." iww
impact on jobs
written by Ethan, August 12, 2011 5:50
The latest figures show that the private sector is adding jobs -- albeit slowly. It is the governments -- federal, state, and local -- which are cutting jobs. Since it is a lead pipe cinch the congress won't pass legislation to increase federal government jobs, why not find a way to cause an increase -- or at least stop the decrease -- in state and local government jobs.
After all, who can object to more sanitation workers, more police, more firemen, more emergency medical technicians, more teachers, more highway repair personnel, more park district counselors/coaches, newer fire/police equipment/stations, etc.?
Several things have been suggested to address this local government funding and job creating/retaining problem: (1) for capital projects, the fed could offer to buy/guarantee state and local bond issues so that the interest rates would be bearable. (2) the federal government could do the bond buying/guaranteeing in place of the fed. (3) the federal government could either borrow to its limit, or sell the 1000 $1M coins, and simply GIVE the state and local governments the necessary money.
Any such program would keep state and municipal workers off welfare, on the job, adding to consumption, and paying taxes.

Several things have been suggested in this regard: (1) The
written by Ethan, August 12, 2011 5:53
Disregard extra line at the bottom.
Destroy Infrastructure - Create Jobs
written by Paul, August 12, 2011 6:17
Set the unemployed to work destroying houses that have been vacant for more than 6 months. That can be done expeditiously and will help the housing market immensely. Cash-4-Clunkers meets the housing market, as they say in Hollywood.
Amazing work Dean Baker does.
written by Rachel, August 13, 2011 12:53
(One needs to state the obvious now and then.)
Social Security is already "means tested"
written by harrync, August 13, 2011 1:00
If you look at your 1040 tax return, you will see that social security income is tax free to low income persons, pretty much fully taxed for high income. [Rather complicated formula, but basically social security income is tax free up to about $50,000 total income for a couple.] If that isn't much the same as a means test, I'd like to know what is.
Universal Healhcare
written by Scott ffolliott, August 13, 2011 7:59
Universal Healthcare
It's Free For Everyone
written by Jay, August 13, 2011 9:47
The average person who has dealt with an elderly family member with medical problems would not advocate for cuts to their financial support. The cost of assisted living and nursing homes is expensive. Many people do not have long term care insurance.

Seniors that cannot take care of themselves are in assisted living facilities with inappropriate care because families cannot afford to put their family member in decent nursing homes. There are families that take shifts caring for people in their families. It's mentally and physically taxing for people to do this without help. And I can only imagine what happens to people without any friends or family.

I have a feeling some of these newspaper employees aren't the type that have to liquidate their grandparents or parents assets to help them qualify for Medicare. The average person is making less than $100,000 per year. Imagine the shock of supporting a family, paying a mortgage, car note, and tuition for children then looking at paying thousands of dollars a month to care for a parent without medicare or social security.

After the senior has passed then the government seeks medicare costs from the senior's heirs. Moreover, older people that don't work in professional settings cannot work forever like the people making the calls about their livelihoods.
written by skeptonomist, August 13, 2011 12:30
Infrastructure does not have to be huge projects that need advance planning. It can be repair of existing facilities, or building structures for public use - the WPA did a lot of that. It would be even more appropriate now that there is so much construction capacity idle.

More aid to the states would have prevented them from cutting back on infrastructure - many planned projects are cancelled when there is a recession.
written by diesel, August 13, 2011 1:05
skeptonomist is right when he says that job projects can target repairs and upgrades. These can be implemented incrementally.

Incidentally, my personal belief is that one reason Republicans despise Roosevelt and deny the obvious benefits and effectiveness of the depression era work projects is that the enduring legacies created by the CCC's et al stand as an empirical, concrete repudiation of their fervently-held, "free-market", faith-based Belief system. Virtually every national and state park in America is graced by delightful old buildings built by the CCCs. And look at the date on many of the old bridges--1932 or thereabouts. Those guys did a lot of fine work.
Three actions that will help us move to a better life.
written by Scott ffolliott, August 13, 2011 1:05
Three actions that will help us move to a better life.

1.)Social Security Retire at age 60 with early retirement 55.
2.)Full time work is a Thirty -hour week 30 Hour Week
3.)Universal Healthcare – It’s Free For Everyone.
written by jethro, August 13, 2011 2:23
Obviously not many job creators around here. No one here ever had to make payroll for, say 20-30 employees. Anyone here ever mortgage their house, put their children's college tuition at risk to start a business. Didn't think so !! All your rants against big business is bull because all of your increased taxes and over regulation at the state and federal level is harmful for small businesses. Small businesses is what keeps large businesses from monopolizing the country, It is called increased competition. People invest in small businesses and removing capital gains is going to hurt the venture investing process. You really should stop the bickering between crazy conservatives and whacky liberal policies, and your Carl Marx themes and work on something that actually matters.
written by urban legend, August 13, 2011 4:19
To jethro -- What rants against big business in these comments are you talking about. I didn't see any. In fact, most of us would be thrilled to see healthy big business and small business if it meant getting to full employment. The reason so many are talking about infrastructure and other government projects is simply to jump-start demand for labor -- which in turn will jump-start consumer confidence and demand for the goods and services that businesses deliver.

It is the ideological right-wing with its reflexive anti-government rants that is anti-business.
written by jethro, August 13, 2011 9:05
One post was in favor of eliminating capital gains taxes and another advocates more government workers. Small businesses that grow to medium to large businesses create jobs and builds wealth. To hinder that process with higher taxes on labor and reducing incentive for rich people( you know - those making more than $250K) to invest in small business ( I have never seen a person making less than $200k or a net worth of less than $1M ever invest in a business as an angel investor)makes no sense and it should be obvious to highly educated elites. But again, I simply ask where are all the risk takers / job creators here. Not many, as usual. If Dean was so smart you think he would put that to use and build a for-profit organization that could really change the world, build wealth for himself and hundreds of his workers, and then he could have a 501C3 corp that he could fund with his own money !!
*Lowering* medicare would stimulate economy
written by FastEddie, August 13, 2011 11:23
If the medicare age were lowered, say to 55, lots of folks would be incentivized to retire - which would open those jobs up.
written by Jay, August 14, 2011 12:15
Actually, I do have a small business.

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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.