For years, Social Security has been an ‘entitlement reform’ punching bag for those intent on displaying fiscal responsibility.
Paul Krugman asserts there is an emerging shift taking place. Arguing that Social Security is, in fact, one part of the retirement system that is “working well”, Krugman makes the case for expansion by dispelling two “bad” arguments for cuts:
“One is that we should raise the retirement age … because people are living longer. This sounds plausible until you look at exactly who is living longer. The rise in life expectancy, it turns out, is overwhelmingly a story about affluent, well-educated Americans. Those with lower incomes and less education … have seen their life expectancy decline.”
“So this common argument amounts, in effect, to the notion that we can’t let janitors retire because lawyers are living longer. And lower-income Americans, in case you haven’t noticed, are the people who need Social Security most.”
Two “is that seniors are doing just fine. Hey, their poverty rate is only 9 percent. [However,] there are well-known flaws with the official poverty measure … [and] the elderly poverty rate is highly likely to rise sharply in the future, as the failure of America’s private pension system takes its toll.”
Krugman concludes: “We’re looking at a looming retirement crisis, with tens of millions of Americans facing a sharp decline in living standards at the end of their working lives. For many, the only thing protecting them from abject penury will be Social Security.”