Paul Krugman Argues to Expand Social Security

Friday, 22 Nov 2013 11:44 AM

By Michael Kling

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Most people are either saying Social Security must be cut or defending the benefit.
But at least some people are arguing that Social Security should be expanded — not contracted. The idea is gaining traction, says economist Paul Krugman in his New York Times column.

America faces a looming retirement crisis due to the demise of defined-benefit pensions and the "gigantic failure" of 401(k) plans that replaced pensions, he says.

Millions will see their living standards plummet in retirement. Within this morass of retirement financing failure, Social Security stands out as the only part that's working. For many seniors, it's the only thing protecting them from abject penury, Krugman says.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

"And this suggests that we should make that program stronger, not weaker."

The standard argument is that benefits must be reduced and the retirement age increased because of the growing elderly population and longer life spans.

Actually, only the affluent are living long. Lower-income Americans have barely seen life expectancies budge over 65, Krugman counters. Those closer to the bottom have actually seen life expectancies fall. In other words, the argument is that we can't let janitors retire because lawyers are living longer.

Others say seniors, with a poverty rate of 9 percent, don't need help.

But the official poverty rate is flawed and understates the poverty rate, he argues. More accurate measures from the Census Bureau put senior poverty at 14.8 percent, similar to the poverty rate of young adults.

And senior poverty, he adds, will probably increase as the failure of private pensions, used by many seniors, becomes evident.

A bill proposed by Senator Tom Harkin (D-Iowa) would expand Social Security by phasing out its $113,700 tax cap, increasing cost-of-living adjustments by basing them on the Consumer Price Index for the Elderly, and increasing payments to low- and middle-income seniors by changing how benefits are calculated.

A poll by the nonpartisan National Academy of Social Insurance finds public support for the proposals, and groups such as AFL-CIO, AFSCME, the Alliance for Retired Americans, the National Organization for Women, the National Education Association, and the Paralyzed Veterans of America support the bill, according to Harkin.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

Related Stories:

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved