NYT OP-ED (Geoghegan) says raise Soc Sec benefits
Great Thomas Geoghegan op-ed at the New York Times http://www.nytimes.com/2011/06/20/opinion/20geoghegan.html
that says what many at FDL have been saying – it is time to raise Social Security, not cut it, noting that SS pays out on average 39 percent of the average worker’s preretirement earnings and suggesting it become 50 percent at a cost of an additional 5% tax, as he notes we can afford it given the FIT only brings in 15 percent of our G.D.P. which is well below other countries and that the January CBS/New York Times poll showed 2/3rds were OK with higher taxes to save Social Security. Indeed he notes that our options include no cap (I want to also add investment income to the base) on high earners, affecting the 6 percent of workers who make over $106,800 a year – a 2.32% of the current wage base effect if no extra benefit to the rich, and a bit over 2% if the current formula is extended into those higher earnings (and much more if investment income is included). Dedicated taxes could be added, such as the estate tax at its 2009 levels to get another 0.5% of payroll equivalent, adding new new public employees for another 0.42 percent, leaving only about a 1% payroll tax cost to get Social Security to 50% of average wages.
He also notes that labor economist Richard B. Freeman reported that hourly earnings of workers dropped by 8 percent from 1973 to 2005. leaving the extra productivity earnings to go to the already rich. Finally he notes that this years payroll tax cut has produced little hiring and warns against the Democrats accepting some “reasonable” version of Paul Ryan’s GOP plan.
Will Democrats (Obama) think of F.D.R., Robert Wagner, or LBJ or will he go with his hero, Reagan.