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Lawrence O’Donnell is Dangerously Wrong About Social Security

Lawrence O’Donnell drank the Kool-Aid on Social Security a long time ago, probably from back when he worked for Daniel Patrick Moynihan in the 1990s. Last night he showed a consistent ability to swallow myths about the most successful social program in American history. He blithely told OWL’s Ashley Carson that Social Security “will not be there” for her generation when it would be able to pay out 78% of scheduled benefits by 2037, which in actual dollars will be more than today’s payout. Does this mean the program ought to be managed to get all scheduled benefits paid at that time? Practically nothing else the government does is the cause for such concern 27 years out, and frankly there is no way to assess the adequacy of a 27-year forecast. All we know is that Social Security’s long-term actuarial situation actually improved slightly this year, and if we ever get policymakers who know how to expand an economy legitimately, the problem would dissipate quite a bit more. There are simply more pressing needs inside and outside the payroll tax system. Nobody on the cat food commission wants to talk about Medicare, paid out of the same pot and scheduled to exhaust its trust fund much quicker, for example. The Affordable Care Act certainly didn’t solve that problem.

When pressed for solutions, Carson suggested capturing the same amount of income as part of the payroll tax cap – 90% – that was the historical mandate of the program, unlike the 83% of income that the payroll tax captures today. I have another suggestion – a decent immigration system that takes the entire economy out of the shadows, increases wages over all sectors and demonstrably expands the economy’s productive capacity.

O’Donnell’s sucessive interview with Ezra Klein was even more absurd. He replayed the familiar argument that life expectancy has expanded since the inception of the program, positing it initially as some type of money-making scheme for the government or something. “The compromise age was 65, do you know what the life expectancy was then? 58!” Yeah, and that’s due to infant mortality, as Klein parried. The life expectancy for those who have reached 65 hasn’t gone up much at all over the years, and to the extent it has, it’s been for the rich, people who least need Social Security. As Kevin Drum explained, we should not decrease the expected years of retirement since, to pick a date, 1970, when we have a country twice as wealthy now as we did then.

Two other things on this.

1) Everybody pushing the increase of the retirement age seems to forget that it’s already rising for people born after 1960. It’s going up to 67 for full benefits; at 62 you’ll be able to receive 70%, with steps up from there. They never seem to mention this increase, put into place in the 1983 reform.

2) Do people not know about the first person in history to receive monthly Social Security benefits? Her name was Ida May Fuller, she paid a whopping $24.75 into the system, and lived to be 100 years old, receiving $22,888.92. The government didn’t cut her off at $25. It’s never been a “you get out what you pay in” program. It’s a social insurance program designed to keep seniors out of poverty. And it always has been. Lawrence O’Donnell claims to care about the younger generations who may see reduced benefits 30 years from now, and he does it by trying to get them to work until they’re 70 and ensuring their benefits are cut, instead of just speculating.

O’Donnell’s about to get his own show on MSNBC, so his biases can continue on the “liberal” network throughout this entire debate.

UPDATE: I’d like to see Lawrence O’Donnell take this quiz, too.

UPDATE II: Ten reasons not to raise the retirement age, again.

CommunityThe Bullpen

Lawrence O’Donnell is Dangerously Wrong About Social Security

Lawrence O’Donnell drank the Kool-Aid on Social Security a long time ago, probably from back when he worked for Daniel Patrick Moynihan in the 1990s. Last night he showed a consistent ability to swallow myths about the most successful social program in American history. He blithely told OWL’s Ashley Carson that Social Security “will not be there” for her generation when it would be able to pay out 78% of scheduled benefits by 2037, which in actual dollars will be more than today’s payout. Does this mean the program ought to be managed to get all scheduled benefits paid at that time? Practically nothing else the government does is the cause for such concern 27 years out, and frankly there is no way to assess the adequacy of a 27-year forecast. All we know is that Social Security’s long-term actuarial situation actually improved slightly this year, and if we ever get policymakers who know how to expand an economy legitimately, the problem would dissipate quite a bit more. There are simply more pressing needs inside and outside the payroll tax system. Nobody on the cat food commission wants to talk about Medicare, paid out of the same pot and scheduled to exhaust its trust fund much quicker, for example. The Affordable Care Act certainly didn’t solve that problem.

When pressed for solutions, Carson suggested capturing the same amount of income as part of the payroll tax cap – 90% – that was the historical mandate of the program, unlike the 83% of income that the payroll tax captures today. I have another suggestion – a decent immigration system that takes the entire economy out of the shadows, increases wages over all sectors and demonstrably expands the economy’s productive capacity.

O’Donnell’s sucessive interview with Ezra Klein was even more absurd. He replayed the familiar argument that life expectancy has expanded since the inception of the program, positing it initially as some type of money-making scheme for the government or something. “The compromise age was 65, do you know what the life expectancy was then? 58!” Yeah, and that’s due to infant mortality, as Klein parried. The life expectancy for those who have reached 65 hasn’t gone up much at all over the years, and to the extent it has, it’s been for the rich, people who least need Social Security. As Kevin Drum explained, we should not decrease the expected years of retirement since, to pick a date, 1970, when we have a country twice as wealthy now as we did then.

Two other things on this.

1) Everybody pushing the increase of the retirement age seems to forget that it’s already rising for people born after 1960. It’s going up to 67 for full benefits; at 62 you’ll be able to receive 70%, with steps up from there. They never seem to mention this increase, put into place in the 1983 reform.

2) Do people not know about the first person in history to receive monthly Social Security benefits? Her name was Ida May Fuller, she paid a whopping $24.75 into the system, and lived to be 100 years old, receiving $22,888.92. The government didn’t cut her off at $25. It’s never been a “you get out what you pay in” program. It’s a social insurance program designed to keep seniors out of poverty. And it always has been. Lawrence O’Donnell claims to care about the younger generations who may see reduced benefits 30 years from now, and he does it by trying to get them to work until they’re 70 and ensuring their benefits are cut, instead of just speculating.

O’Donnell’s about to get his own show on MSNBC, so his biases can continue on the “liberal” network throughout this entire debate.

UPDATE: I’d like to see Lawrence O’Donnell take this quiz, too.

UPDATE II: Ten reasons not to raise the retirement age, again.

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David Dayen

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