Reality Hitting: Demography, Retirement Ages, and New Jersey
Some months back, the magazine of the Society of Actuaries, the Actuary, ran an article about a supposed epidemic of dementia that was going to sweep over Canada (and the world in general). It was written by some Canadian consultant who was trying to get the government to pay for her services (at least, that's how I read it).
I did not react well to this article. The following is the screed I hastily tossed off to the editor:
A few remarks on this article in the recent issue of The Actuary:
First, a jarring phrase in the sidebar:
This accepting attitude has allowed governments to ignore their
plight and happily accept the $25 billion a year in unpaid laborOh, heaven forbid that family members care for each other, when "the government" should have been picking up the tab. Oh my, we care for our autistic son when he should be institutionalized. How dare the state expect me to deal with him.
Now, clearly some people do need care beyond the physical (and mental) abilities of family members, but the fact that people with mental disabilities can be difficult to live with does not mean that it's the responsibility of "the government" to make the difficulties of life go away. I think those who colonized Canada may have thought this sentiment odd; one did not go to Canada for the harshness of life to be worn away in the swaddling embrace of the state. And certainly one did not expect someone else to take on the responsibility of caring for one's aging mother. It was a duty to do so.
But that's just a side issue, distracting from the main thrust of the article. It's not clear to me that senile dementia is actually an epidemic in normal terms. I tried to look around for some statistics on dementia incidence by age and sex, and came across many articles and abstracts. Here are a few:
http://archpsyc.ama-assn.org/cgi/content/full/55/9/809
http://www.ahaf.org/alzheimers/dementia-in-extreme-elderly.html
http://www.sciencedaily.com/releases/2010/02/100224103353.htm
It seems that the issue is that dementia incidence increases with increasing age. There seems to be sex-differentials in types of dementia (for some reason women have higher incidences of Alzheimer's Disease, but men have higher incidence of vascular dementia). But in general the reason you have more female dementia sufferers is that more women survive to older ages, and older people have a much higher incidence of dementia.
So it seems that this "epidemic" is just a part of the larger mortality trends we see impacting retirement systems: people are living longer, and there are consequences to that. Yes, there is early-onset Alzheimer's Disease, but that forms a small percentage of senility issues.
And while the author gives recommendations that suspiciously sound like it would help her own organization (how convenient that I can click in the author bio and end up at her business's website), here is one of my own recommendations to help combat this issue:
Get people to work longer.
Source:
http://www.guardian.co.uk/society/2009/may/18/alzheimers-disease-dementia-retirementTo quote the linked article:
Working beyond normal retirement age might help stave off dementia, scientists said today.
Keeping the brain active later in life appears to reduce the chances of an early onset of Alzheimer's disease, according to a study of 382 men with probable dementia. The researchers suggest a significant link between later retirement and delayed symptoms.
....
The researchers found no link between education or employment and dementia risk, but found that those who retired later prolonged their mental abilities above the threshold for dementia.
Of course, it can be that those who will have earlier dementia retire earlier due to mental difficulties, but given that life expectancy past the old "traditional" retirement ages has increased greatly over the past century, it's just good public policy in general to encourage people to work well past what used to be the age of decrepitude but is currently an age of still quite good productivity.
Another recommendation is for people to have more babies right now. Because those caring for the elderly senile population when it swells over the next few decades due to demographic patterns already baked-in will be those born right now if they want strong, young backs to help physically.
Going back to my first point, while it has been considered the duty of family to take care of each other, due to dwindling fertility, and relatively high divorce rates, ultimately it will be non-family members providing a huge amount of care to the extent that these elderly will be cared for. So it would help if there are plenty of people to work in this sector.
Or perhaps Japan will have improved robotics so well that actual human beings will not be needed.
In any case, it doesn't help to look at this "dementia epidemic" as some discrete occurrence, as it is part of the same demographic issue currently roiling Europe and soon to hit North America as well (though our fertility rates haven't cratered as badly...at least not yet).
I do understand that this author is not an actuary. But if we keep on pushing the concept of actuarial work as embracing risk management in a global sense, it does us no good to look at a problem as some isolated issue when it is part of a larger trend that is impacting so much.
I may have been a trifle exhilarated when I wrote it. In any case, the magazine printed it (pages 8-9) without many edits.
But this is a major point that many miss: people are living to much older ages now in huge numbers, and they didn't have many kids (and then there is the increasing percentage of childless women). This is going to have a huge effect on retirement and long-term care possibilities, even for the Boomers. The demographic crater will have an impact well before my generation becomes decrepit.
There needs to be a readjustment of expectations for everybody, in terms of what is feasible.
Consider the multifarious impacts of retirement age. In this analysis by Bill Zettler, retiring at age 55 compared to age 65 increases a pension cost by almost 70% by itself. The current issue of the Economist has an entire section on retirement, pensions, and public finance - their editorial accompanying the feature indicates that our retirement age expectations are still way too low.
But wait - good news! Because the economy sucks so bad, Boomers have had to readjust to the reality, and no matter what they had planned on, realize they may need to work to higher ages. If you want a wonkier overview of the issues, here's a presentation from the American Academy of Actuaries on retirement issues from a Capitol Hill briefing yesterday.
But let's make it concrete. Consider the sad case of NJ pensions. Actuary John Bury's latest post is titled The Obvious Answer to New Jersey’s Pension Mess :
Scare the retirees to death.
At least that’s what it looks like when New Jersey’s Senate president Stephen Sweeney tells retirees they could see their pensions cut by two-thirds without reforms.
The bizarre part is he’s absolutely right…..though I don’t think he really believes it.
If every retiree, current and future, had their benefits reduced by two-thirds it would indeed save the plan since the contributions are averaging about one-third of what they should be. But who would sign up for this solution?
John calls it scaring the retirees; I call it managing expectations.
A year ago, I explained how one can fulfill long-term financial promises, and how, if they're not prepared for, the promises will not be kept. People need to know as early as possible how realistic their expectations are. The various hissy fits being thrown by public unions are denials of this reality, and a refusal to admit that their expectations will not be met.
Because they won't.
If nothing else, other than not having enough rich to tax, there aren't enough people, period, to support an increasing number of non-working adults. You didn't have enough kids, Boomers. There will be consequences to that. Sucks to be you.
But hey, if you work to older ages, you can stave off some senility! Win-win!
I understood that there would be no math
[Silly people - with Meep, there's always math!]
Recently we saw the new White House spokesman getting broken in by Jake Tapper:
"If I borrow money from you to pay off the interest for the debt I owe to Geoff, am I not adding to my debt? ... The president seems to think that that borrowing money to pay the interest on the debt is not adding to the debt. I don't understand that math."
That's been a theme of late. A lot of tricksy math, that at its heart, is shown to be a total fraud. Here's a bit of math I think any of us can understand:
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
That's the wisdom of the inimitable Mr. Micawber from David Copperfield [a Dickensian character who was a thinly disguised copy of the author's spendthrift father]. A wisdom that the current generations are learning the very very hard way.
Let's look around to see if we can see more harsh math, shall we?
The government's primary activity? Moving tiny bits of green paper around:
That's supported by fewer and fewer people:
Need to have money for retirement? You really should be saving lots more than you already are. No really, you're screwed. Big reason for being screwed - longer life expectancies [even in Canada!]. And unrealistic expectations...or treating expectations as certainties.
And here's something quick for New Jersey public employees considering retirement. But given how well the pension has been funded... well....that's what you get from having an electorate that doesn't care about math. [Math is hard! Aren't there rich people we can tax?]
Enough doom and gloom! Let's look at happy math! [and speaking of rich people to tax....]This here guy just had great bank from his old boss -- that's new White House chief of staff Bill Daley who got $8.7MM from J.P. Morgan.
Okay, enough happy talk. Back to penury. California teachers pension headed toward insolvency. Illinois governor seeking federal backing of pension obligation bonds....ha ha, good luck with that one, Quinn, with a Republican House. As per Jake Tapper questioning borrowing to pay for interest payments, others are questioning Quinn's borrowing plan for Illinois.
San Diego retirees, I don't know how much longer you'll be getting that 13th check pension bonus.
For those who want a bit more public pension valuation wonkery, Girard Miller breaks down some of the major issues in the area.
And back to some more hopeful math -- Gov. Perry of Texas challenging the UT system to figure out how to cut costs. Well, I guess it's hopeful if you're a prospective student. The profs might not be as happy about it. Hmmm, perhaps I know of a company that could talk with them [the fact I contract with them is clearly coincidental]... [UPDATE: A plan for reaching the 10K degree, and yes, online videos are involved.]
MORE MATH: The dismal math of fixing Social Security - if we want the benefit structure to be unchanged and make a fix right now, then payroll taxes must bump up from 12.6% to 15.7%. But that's assuming a change is made right now. I favor changing the benefit structure to make people change their behavior to working longer.
Parents to pay up for public schools in California, beyond normal taxes
Boomer Retirement Watch — 3 Jan 2011
I have a few google news alerts set up to help me hoover up all the retirement- and pension-related articles out there [I also have help from people like Dan and a few correspondents who send along interesting stuff]. And a bunch of Boomer retirement whining has started to creep into my alerts. I figure I might as well turn this into a feature.
DUH RETIREMENT ADVICE FOR BOOMERS:
[edited heavily for content]
1. Have a plan
2. Save more
3. Retire later
4. Scale back your lifestyle
5. Delay Social Security
6. Quit whining
The first of the baby boomers—the post-war Americans born between 1946 and 1965—start to hit retirement age in 2011. And they're not coasting gracefully into the golden years. The entire nation, of course, lost its spunk during the recession that lasted from 2007 to 2009. But the once-upbeat baby boomers seem to be taking the longest to shake off the blues. According to surveys by the Pew Research Center, 80 percent of boomers say they're dissatisfied with the way things are going in the country, a higher proportion than any other age group, younger or older. Part of that may be natural, since people in their 50s tend to deal with the highest amounts of stress and show the lowest satisfaction levels. But the boomer bummer may also reflect the changing fortunes of America itself, and widespread unease about the nation's future.
Yes, I know I'm an unpleasant person to be around b/c I remind people of stuff like their mortality [I'm not here to make friends]. But the way I really annoy is I know a lot of history. And seriously? People have it pretty sweet now compared to prior millennia.
So guess what? Many of the boomers will live well into their 90s, and if they want to avoid the cat food route, they should keep working til they really can't do it any more.
Some note that the boomers' problem is their own fault:
The people who want their benefits preserved are the ones responsible for the problem. After all, it was they who broke the "chain of trust" by which each working generation supports the retired generation's benefits. They reduced the number of their children to about two per family, or even fewer, so that today there are about 60 to 70 million fewer consumers and workers than there would have been, and that many fewer people to support the boomer retirees and soon-to-be retirees.
It would be condign punishment if the boomers' benefits were indeed cut; it would be the utmost in "fairness." In the meantime, the coming generation of workers must be educated to the economic and demographic benefits, and even psychological benefits, of stable marriages and families with many children, say six to eight.
In other words, to save Social Security, have babies.
Now, my parents had 3, but it was nothing on my mom's family of 6. My dad came from a family of 3, though.
Those darned Protestants.
[Love ya, grandma!]
It may be hard to believe, but the generation that transformed America as it came of age in the 1960s is now entering its senior years.
"There are 7,000 boomers a day who will be turning 65 in 2011, which is a significant birthday for sure," says Steve Cone, executive vice president of AARP.
Sixty-five used to be the age when Americans stopped working, kicked back and embarked on serious leisure to make up for all those decades of the daily grind. But just like with every other stage of life they've gone through, baby boomers are expected to transform how we think about "retirement."
If I hear about how the boomers are reinventing hip replacement and senile dementia, I will be very, very displeased.
More stupidity in being surprised that time moves at 1 year per year:
Green Bay's first baby boomer graduated from West High School and maintains close ties to the community.
...."I didn't think of myself as a baby boomer until it started being talked about," he said. "Right away I realized, 'Hey, I'm the first.' I thought it was cool."
...."I'm kind of surprised that I'm that old. I feel kind of young," he said about reaching retirement.
What, did he expect to be dead by now? How the hell can he be surprised to get old? This is one of the most inevitable things that happens to person [and you can't be surprised to be dead...well, maybe you can, but people generally aren't quoted about that]. You can be surprised to have a broken leg or a kid from a dalliance decades past that you didn't know about. But surprised to get old?
Dear lord, we're going to have at least 20 years of this, aren't we?
[Love ya, ma!]
A Meepie Blogsgiving
Wherein I acknowledge all the people who have helped me with respect to public pension blogging.
First, Jeremy Gold, a pension actuary, who has written quite a bit on the theoretical (and practical) issues with regards to actuarial work in the pensions field, whether private or public. Once I read through his stuff, I became a Jeremy Gold acolyte, and spread his gospel at The Actuarial Outpost.
Another pension actuary, John Bury, who I first read at nj.com but is now blogging on his own at BuryPensions. He has mainly covered NJ pensions [which will implode first.... NJ or Illinois? It's thrilling! ...if you're not a pensioner or taxpayer for NJ or IL], but has also looked more broadly.
Jack Dean at Pension Tsunami - the go-to source for news stories on pension issues. He and Marcia Fritz head Californians for Pension Reform.
Ed Mendel at Calpensions, who does original reporting on California pension issues, and really gets into the nitpicking number-crunching details.
Frank Keegan at the Franklin Center, who posts on public finance and pensions.
Leo Kolivakis at Pension Pulse, who gives a more international perspective on pension issues.
E.J. McMahon at the Empire Center, which covers NY public policy issues.
The good people at Illinois Is Broke, who will supply all sorts of interesting Chicago stories, amongst others, over the next couple years... I can just feel it.
Mish of Global Economic Trend Analysis, who covers economic issues in general, but has often looked at the state of public pensions and public finance.
Steven Greenhut, who writes columns all over the place and most recently the author of Plunder! How Public Employee Unions are Raiding Treasuries, etc. who covers all sorts of public union shenanigans.
Not named -- my mystery supporter who has been feeding me bucketloads of stories, many of which don't get sucked up in my daily news alerts and twitter searches. He knows who he is, and I thank him muchly.
And of course Dan and our merry POWIPping crew.
Happy Thanksgiving, y'all!
Retirement Age roundup – 22 Nov 2010
- Retirement age patterns around the world.
Key tidbit: "Many governments relaxed retirement-age rules in the 1970s and 1980s, and are now restoring retirement ages to their former levels." And why might there have been loosening in those particular decades... hmm? Perhaps the boomers were coming into the workforce as a glut, and could support more retirees than previous demographics could. Too bad those boomers didn't have enough kids to keep that gravy train rolling.
- Canada looking at its own retirement age increases. With the earliest boomers getting to keep the previous generous benefit....well, for now.
- Germany sticking to its guns. Retirement age to be raised to 67 from 65. And yet you will not hear as of many protests as the French have...where their move was just 60 to 62.
- From the great socialist state of Bolivia, a movement in the opposite direction: retirement age to be dropped to 58. Smoke up, comrades! You've got a duty to drop dead soon after retirement, or this will not keep up!
- And here in America, a little reality about the Social Security retirement age:
In 1940, retiring workers collected benefits for an average of 14 years. Today, that number is up to about 22 years. When today’s 4 year olds retire, retirees would collect Social Security for almost 26 years. In other words, an already beleaguered Social Security system falls farther behind demand.
....
If, for instance, we were going to draw benefits for as long today as we did when the system was young and healthy, we shouldn’t retire until age 75. As for those 4-year-olds we worry about, their retirement age should bump up to 80.
Social Security — Much Ado About Cutting
Figuring out Social Security benefit formulas can be complex -- there are a lot of moving parts, with salary caps, inflation/productivity indices, bend points, etc.
But the easiest variable to understand is the Full Retirement Age. The higher that is, the lower your benefit at any given age of taking Social Security benefits. Raising that is essentially a benefit cut.
One of the proposals to come out of the current deficit/debt reduction talks is to increase that FRA. The American Academy of Actuaries made an official recommendation for this a few years back, but it seems the time is ripe now for that discussion to really do it. While the Academy (of which I'm a member), notes that there's a demographic issue -- people are living quite a bit longer than in prior decades, especially women, I think the demographic issue is not so much life expectancy in retirement, but number of workers supporting a retiree. Simply put, the Boomers did not have enough kids. If they had reproduced in a manner similar to their parents, they probably could have afforded a nice long retirement just like their parents.
But we have the situation we're in, so now what to do? Andrew Biggs is recommending not just increasing the NRA, but increasing the age of first eligibility. Even though legislation in the 90s has raised the FRA from 65 to 66 (for Boomers) to 67 (for Gen Xers), the minimum age hasn't budged a bit from 62. Problems with that: age of eligibility for Medicare isn't until 65, so there are issues there; the great majority of people take SocSec benefits within that year of first eligibility, and end up with a much smaller benefit than if they waited til later. By the way, raising the age of first eligibility will not change the balance sheet solvency of SocSec, as the benefits are roughly "actuarially equivalent" no matter the starting retirement age (that's why the benefits are so much lower if you start at age 62 as opposed to age 67 -- they really are trying to make the result equal).
That said, the issue for Social Security isn't just solvency but actual cashflows. I'm not sure how Biggs' proposal will affect the cashflow balances of OASDI taxes versus benefits paid out, but that's our short-term problem. Social Security has already "flipped" from being a cashcow in OASDI receipts to being a suck on the Treasury. The "Trust Fund" is having to pay out.
Now, there's all sorts of negative responses to the idea of raising either the FRA or the early retirement age. For one, not every group has similar life expectancies (though I noted in the comments there that black women have a higher life expectancy than white men... not much attention is paid to the sex gap in life expectancies. This holds even in life expectancy from age 65, not just birth). Most people have realized that raising the FRA is a benefit cut.
At this point, it's all about managing expectations. I think my generation knows it's not going to have the sort of SocSec cover that our parents (the Boomers) will...but I think the Boomers are going to need to manage their own expectations as well. As I mentioned above, they didn't have enough kids, and they're not going to get the "full" payment their parents did. I'm fine with "The Greatest Generation" having cushier benefits than mine or the Boomers - they did pay for it in sacrifices in WWII as well as great productivity in terms of economics as well as babies. But the Boomers didn't pay for it with babies. Sorry, guys.
So for all the stories about how SocSec is the third rail, and you can't touch Boomer benefits... I don't think that's true. Yes, some may have to fall on their swords, but reality is here, and if it's not taken care of now, some major corrections will force it to happen. The grandchildren aren't going to pay for it (partly because there aren't enough grandchildren), because the Chinese won't be willing to pay for it in the interim.
I think Social Security will eventually become an explicit welfare program for the elderly, but we have a long way to go before we get there. Changing the retirement age(s) is but one step.
PRIOR POSTS:
- Social Security and retirement age roundup
- Time to "fix" Social Security
- Social Security politics - What wasn't said
Making Promises for Someone Else
...and trying to make them stick.
Doesn't work too well in one's personal life, and it's not working too well in public life now.
Two examples from the Fat Man of New Jersey - first, via Ace of Spades, we have Chris Christie talking about how Corzine tried to suck out all the cash as he was going out the door; and the most recent decision from Christie to kill a rail tunnel for which Jersey would have been on the hook for cost overruns.
The whines go up from the crowd ... "OH BUT WE WERE PROMISED!" Yes, and who was promising? Do you see those people in the governorship of NJ? Christie isn't putting up with that crap.
All sorts of groups are learning the value of a government promise -- when they can't even pay basic bills to outside vendors, do you think you're going to be safe, public employees? You can pour as much money as you want into the election, but that didn't help ex-governor Corzine, now did it?
The governed class are now in revolt against the governing class, and trying to make them pay for the promises they have made and want to make. The money is running out fast in some pension plans; John Bury (now in new blog digs) has projected the NJ pension money will be gone in 5 years.
Of course, it's not just public employees -- people are trying to hold onto the "entitlements" that demographics are not going to let us keep unchanged... but while people don't want them cut, they do realize that they will be cut.
But this is the real bottom line - even if the public unions did manage to buy/steal the election via various shenanigans, there's not much they're going to be able to do to keep the cash train running. The money is running out, no matter who is in charge. And the way this demographic Ponzi stops working, it's not that people can cash out and get their dough before it collapses. They need a steady flow of money.... and at some point that will stop if expectations and benefits aren't moderated starting now.
And you bet your sweet bippy that a "correction" of these expectations is going on right now, and will be imposed on the Boomers. I may love my Ma, but it's not like I feel any obligation to her collective generation. Others who waited too late or had no kids...nobody is going to feel obligated to you.
And we certainly don't feel obligated to fulfill the promises you made to yourselves, hoping to impose them on younger generations.
It’s Our Birthright!
Established 1982 via the Socialists in France.
I mean, that birthright is younger than I am. It's younger than both my sisters. It's younger than my husband's Eurovan (that caught fire at a gas station a couple years back, but that's neither here nor there).
To compare - here's a list of official retirement ages from around Europe. A few countries still have separate retirement ages for men and women (illegal as per the EU bigshots... and it doesn't make much sense, given that women are much more long-lived than men. But the countries with sex-separate retirement ages are phasing them to equality over several years, and some are doing it cold turkey.) Countries with retirement age 67: Norway, Denmark, and Germany in years to come (normal retirement age for us Gen Xers in the U.S., too). Many have 65 as the comparison point.
As noted in many other pension/retirement-related posts here at POWIP, if you want to retire young: SAVE YOUR OWN DAMN MONEY.
Of course, in the Socialist Paradise of France, it's tough to do that, given you're being taxed to let a bunch of whiny brats retire at the age of 60.
Only if you guys had increased your smoking habits, instead of banning smoking in various public places. Where was you patriotism then? Why did you undermine your birthright!
Well, there's always the Soylent Green/Logan's Run solutions.
Public Pensions and Social Security roundup, 29 Sept 2010
First, let's enjoy a round of public union kvetching:
University of California workers bitching over having to pay for their benefits; and more bitching here.
NJ unions pissed at Christie altering their deals -- unions: pray Christie does not alter them further. [actually, they will have to be altered further: See this 8-parter on CRAP by actuary John Bury: pt 1, part 2, part 3, part 4, part 5, part 6, part 7, part 8 -- if you read only one part, read the last where Bury sums up (each part is on a particular aspect of Christie's proposal):
Using my real-world numbers the shortfall is about $181 billion right now. Forget about 2041. By then there will either be no pensions or $181 billion won't buy you a cup of coffee. Let's be brutally honest.
And that's the real deal. There will not be enough in taxes to make up the shortfall in some states. Some people will not be getting their pensions. The unions had better wise up real fast, because the pensions Ponzi is going to devastate them. They had better adjust to reality if they want to survive at all.
In the category of "Isn't that conveeeeeenient", we have Andrew Cuomo's cousin trying to make investment deals with NY pension funds. The comment section on that story is a hoot. Someone brought up the HUD scandals, which I bet Cuomo has bet that noone would bring up. Hey Carl, maybe you'd like to remind voters of that one?
Oh, stuff is going on in France. Yeah, that socialist-given right to retire at age 60.... well, let us know how that works out for y'all. Mind you, the protest is against raising that age from 60 to the very very old age of..... 62.
Speaking of which, it seems the Academy's recommendation to raise the Social Security Normal Retirement Age has been given some space in the media. Yay, we actuaries!
But there will always be idiots. Hey, dude, do you want people to die earlier?.
Social Security politics – what wasn’t said
Look like it's that time of the month again.... Obama attacking a strawman to make an unpopular-policy-to-come sound palatable in contrast (and hopefully distract from all the unpopular stuff that's already passed):
President Barack Obama used the anniversary of Social Security to trumpet Democrats' support for the popular program and accuse Republicans of trying to destroy it.
....
Some Republican leaders in Congress are "pushing to make privatizing Social Security a key part of their legislative agenda if they win a majority in Congress this fall," Obama said.He contended that such privatization was "an ill-conceived idea that would add trillions of dollars to our budget deficit while tying your benefits to the whims of Wall Street traders and the ups and downs of the stock market."
Most Republicans, in fact, are wary of touching that idea, because Social Security is virtually sacrosanct to voters, particularly seniors.
....
Many Democrats adamantly oppose any cut in benefits to reduce costs and some won't accept a gradual increase in the retirement age, something that was done in the last overhaul in 1983. Republicans say an increase in Social Security taxes is out of the question, even for the wealthy.Unless Congress acts, Social Security's combined retirement and disability trust funds are expected to run out of money in 2037. At that point, Social Security will collect enough in payroll taxes to cover about three-fourths of the benefits.
Let's consider reality for a second -- even if Republicans were seriously proposing Social Security privatization now, after it crashed-and-burned during the Bush administration, and after an even bigger market crash-and-burn, there's no way this would pass during Obama's administration. Republicans cannot win enough seats this November to have a majority large enough to overturn an Obama veto. The soonest this could be a "real" proposal is 2013, requiring the booting of Obama.
That out of the way, I think the reason he's demagoguing this, other than DCCC polling indicating that scaring people about SocSec privatization is a winning strategy for Dems for the Fall (good luck with that), is that there will be real SocSec proposals coming out from Obama's deficit commission, and people aren't going to like them: it will involve cut benefits and increased taxes.
And why is this necessary? Not because of some future Social Security disaster, but because of a lack of cash right now. The Trust Fund has been "cashing out", as opposed to being the cash cow it has been for the past 25 years or so. Also, it's a lot easier to cut Social Security benefits than Medicare, as SocSec is a straight cash formula. Change the formula to reduce benefits, and it's reduced across the board.
Easiest way to reduce the benefits: increase the retirement age. Note that Obama said nothing about Republicans wanting to increase the retirement age....probably because that's one of the proposals that will be put forth in real legislation. The left-wing realizes what's really in the cards, because they're starting to hound Democratic incumbents over the retirement age issue.
Meanwhile, a coalition of 60 liberal groups and advocates for the elderly, including the AFL-CIO and MoveOn.org, are predicting a different threat to Social Security: the possibility that a bipartisan deficit commission created by Obama will propose slashing benefits to help dig the nation out of debt.
Coalition members plan to buttonhole lawmakers as they campaign for reelection this fall, demanding that they sign a pledge to oppose any cuts to program entitlements, such as raising the retirement age. "Over the coming weeks and months, we're making sure every politician is put on notice: If you're looking to raise the retirement age, you should be looking to retire in November," said Nita Chaudhary, campaign director at MoveOn.org.
Well, again, good luck with that. I'm wondering how much of the current moves of the progressive cadres are to try to get some of the credit for Democratic electoral failure this year. I doubt anyone will be fooled by this.
This is not to say there aren't issues with regards to raising the retirement age (yes, I linked to Krugman, but the stats are good.) But then, those who don't live very long into retirement have never been a big concern of Social Security Old Age benefits. And while the life expectancy for black men truly does suck, black women have a higher life expectancy at age 65 than do white men, and not many are making much of that.
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