There’s a long, tired tradition of pundits wringing their hands over a strange kind of crisis: people in the richest society in human history having the audacity to live long enough to collect Social Security. The Washington Post‘s editorial board just added itself to that list.
Yes, America is aging. Yes, the federal government faces serious long-term fiscal choices. And yes, Congress needs to act before Social Security’s trust-fund reserves are depleted. But turning those facts into a case for cutting retirement security requires leaving out an extraordinary amount of the economic story.
Let’s get one thing straight: Policymakers knew about the existence of Baby Boomers and that there would be a large wave of retirements. The 1983 reforms were explicitly designed to address that fact.
Roosevelt research shows that the demographic assumptions underlying that reform held up remarkably well. What policymakers did not anticipate was how dramatically earnings would become concentrated at the top and escape taxation—or how badly the government would manage the Great Recession and its aftermath. Those economic failures help explain why Social Security’s finances deteriorated faster than expected.
The commentators on this subject also treat it as a counting exercise, suggesting a worker’s only relevant characteristic is that they possess a pulse and a paycheck. In fact, the number of workers per retiree misses the bigger story. Social Security is funded by earnings, so its long-term health isn’t about a raw headcount in a vacuum, but how much people are able to earn and whether those in the top income brackets pay their fair share.
And turning this into a young-versus-old fight elides the other side of the generational ledger.
Roosevelt’s research finds that the richest 0.1 percent of Americans—roughly 340,000 people—hold about $23 trillion, or one out of every six dollars of private wealth in the United States.
Where is the discussion of decades of extraordinary asset appreciation? Of inherited fortunes? Of the enormous share of economic gains captured at the very top? Roosevelt’s research finds that the richest 0.1 percent of Americans—roughly 340,000 people—hold about $23 trillion, or one out of every six dollars of private wealth in the United States.
Somehow, when searching for the resources necessary to put America on sustainable fiscal footing, those trillions are invisible. Yet, the people receiving Social Security checks are not.
There is, however, an alternative hiding in plain sight: raise revenue.
We can raise the taxable wage base on those earning the highest incomes (which can also lower the deficit at the same time). We can close loopholes that allow labor compensation to escape payroll taxation. We can consider revenue from the forms of investment income and inherited wealth that have become increasingly important for the ultra-rich.
And we can pursue stronger wages, worker power, labor-force participation, care infrastructure, immigration policy, and recession management that make Social Security—and the economy beneath it—stronger in the first place.
Some look at an aging country and see an unaffordable liability. A better question is what a country with extraordinary productive capacity owes to the people whose work built that wealth—and what resources it is willing to marshal to keep a basic social promise.
The resources are there. The policies are there. Policymakers have tools to raise revenue to save Social Security without cuts.
There’s a long, tired tradition of pundits wringing their hands over a strange kind of crisis: people in the richest society in human history having the audacity to live long enough to collect Social Security. The Washington Post‘s editorial board just added itself to that list.
Yes, America is aging. Yes, the federal government faces serious long-term fiscal choices. And yes, Congress needs to act before Social Security’s trust-fund reserves are depleted. But turning those facts into a case for cutting retirement security requires leaving out an extraordinary amount of the economic story.
Let’s get one thing straight: Policymakers knew about the existence of Baby Boomers and that there would be a large wave of retirements. The 1983 reforms were explicitly designed to address that fact.
Roosevelt research shows that the demographic assumptions underlying that reform held up remarkably well. What policymakers did not anticipate was how dramatically earnings would become concentrated at the top and escape taxation—or how badly the government would manage the Great Recession and its aftermath. Those economic failures help explain why Social Security’s finances deteriorated faster than expected.
The commentators on this subject also treat it as a counting exercise, suggesting a worker’s only relevant characteristic is that they possess a pulse and a paycheck. In fact, the number of workers per retiree misses the bigger story. Social Security is funded by earnings, so its long-term health isn’t about a raw headcount in a vacuum, but how much people are able to earn and whether those in the top income brackets pay their fair share.
And turning this into a young-versus-old fight elides the other side of the generational ledger.
Where is the discussion of decades of extraordinary asset appreciation? Of inherited fortunes? Of the enormous share of economic gains captured at the very top? Roosevelt’s research finds that the richest 0.1 percent of Americans—roughly 340,000 people—hold about $23 trillion, or one out of every six dollars of private wealth in the United States.
Somehow, when searching for the resources necessary to put America on sustainable fiscal footing, those trillions are invisible. Yet, the people receiving Social Security checks are not.
There is, however, an alternative hiding in plain sight: raise revenue.
We can raise the taxable wage base on those earning the highest incomes (which can also lower the deficit at the same time). We can close loopholes that allow labor compensation to escape payroll taxation. We can consider revenue from the forms of investment income and inherited wealth that have become increasingly important for the ultra-rich.
And we can pursue stronger wages, worker power, labor-force participation, care infrastructure, immigration policy, and recession management that make Social Security—and the economy beneath it—stronger in the first place.
Some look at an aging country and see an unaffordable liability. A better question is what a country with extraordinary productive capacity owes to the people whose work built that wealth—and what resources it is willing to marshal to keep a basic social promise.
The resources are there. The policies are there. Policymakers have tools to raise revenue to save Social Security without cuts.