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New CBO report – Lower (not increase) the early retirement age!

Bruce Krasting's picture




 

At one point or another, all the big name politicians have indicated they would support changing the minimum Early Eligibility Age (EEA) rules for Social Security. Obama has said it, so has Boehner. Even guys who love Social Security, like Sen. Harry Reid, thought it might be okay. Many economists have publicly opined that raising the EEA for benefits is good economics, as the average life expectancy is higher than it was forty years ago. To me, the most significant evidence that a consensus is forming on this important issue is the fact that the ultimate supporter of the Grey Panthers, the AARP, came out with its support last year.

I think that all of these deep thinkers are wrong. In fact, a good case can be made for lowering the minimum retirement age from 62 to 60. From the Congressional Budget Office report on the consequences of increasing the Early Eligibility Age (EEA):

 

 

If that doesn’t convince you, consider these words:

Budgetary Effects

The budgetary effects of a rise in the EEA in the short term would be different from those over a longer period. Federal outlays would decline in the short term because people would have to wait until they were older to apply for Social Security benefits. Over time, higher subsequent monthly benefits would offset an increasing share of the savings from delayed eligibility.

How is it possible that all of the folks pushing for an increase in the EEA could be wrong on this issue? Intuitively it makes sense. Delaying the age for benefits should reduce expenses for SS and therefore save it money, thus keeping it solvent for longer. It sounds so simple. Why doesn’t it work?

The answer is that increasing the EEA won't improve the finances of Social Security (or the country as a whole). SS discounts the amount payable if early retirement is opted for. It is calculated so that SS is “expense neutral” if benefits are taken at today’s EEA of 62 years versus the higher benefits available by waiting until 64 years.

The following formulas are a simplified look at how this works:

Case #1

Benefits payable at age 62 = $1,000 per month

Average Life / (years of benefits)= 78 / (16 years)

Total life time benefits = $192,000

 

Case #2

Benefits payable at age 64 = $1,142

Average Life / (years of benefits) = 78 / (14 years)

Total life time benefits = $191,856

 

The formula that SS uses to discount benefits for those seeking payments prior to their Full Retirement Age (FRA) is quite simple:

 

The reductions are based on the month of claiming: A benefit is reduced by 5/9 of 1 percent for each of the first 36 months before the FRA.

For example, if a man was expecting a monthly check of $1,000 at FRA, he would receive $810 monthly if they took benefits three years earlier. This simple formula immunizes SS from the cost of those seeking benefits early.

 

I hope that this discussion proves the point. There is no economic consequence to SS (or to the overall fiscal position of the US) from raising the EEA. Now consider what would happen if the EEA were to be lowered from age 62 to 60 years.

Using the same 5/9th% monthly discount rate, the individual who seeks benefits at age 60 would get a check 13% less than what he would have received by waiting until he was 62 to quit working. Using the formula from above: 

Case #3

Benefits payable at age 62 = $1,000 per month

Benefits payable at age 60 = $870 per month

Average life (years of benefits) = 78 / (16)

Life time benefits =  $188,000

 

Note: The $188,000 number above does not take into consideration the time value of money and changes in payments of Disability Benefits. When these factors are built into the equation, the numbers between the various ages of retirement all equal out.

 

Today, approximately 60% of eligible beneficiaries elect to get their SS checks at age 62 (EEA). I can't’ accurately project how many people would elect to retire at age 60 or 61, if it were possible to get discounted benefits at earlier ages. I think it's a large number.

Of the 3.6mm individuals who will get new SS benefits this year, 2.2mm (60% of total) are getting their checks upon reaching the EEA. If the EEA were lowered to age 60, how many people would take advantage of the change?  Given that there are two years worth of individuals who would be eligible for reduced benefits, an estimate for the number of people who might opt-in to early retirement, if given the chance, is between zero and 4.4mm. For the sake of discussion, call it 2mm. That would be very helpful.

What would this do for the economy? It would shrink the supply of available workers. It would happen fairly quickly over the course of the first two years that the EEA adjustments became effective. As older workers leave the workforce earlier, the demand for younger workers would increase. People at all ages (including older workers not seeking to retire) would “move up the ladder” faster. There would be more new job openings for younger workers coming into the labor force.

High unemployment is corrosive to society. It’s particularly problematic when the shortage of jobs creates very high rates of unemployment for young workers. High youth unemployment is the scourge of Europe today. Total unemployment in some of these countries is around 10%, but youth unemployment is over 20%. The situation is similar in the USA. The numbers have not yet reached the levels in Europe, but the trend in the USA is firmly in place. If nothing is done, the likely outcome is for youth unemployment north of 20% in the USA.

Based on the information provided by the CBO, I think it should have analyzed changing the EEA down (as well as up). Lowering the EEA would be neutral to the long-term finances of both SS and the country. It would also open up a few million jobs. Many of those jobs would be entry level positions. Just what we need. This chart illustrates the problem we face. Employment for younger workers is currently at a post WWII low.

 

 

I can’t figure out why the CBO didn’t consider the implications of a reduction of the EEA. A team of analysts must have worked on the report for weeks. But they only looked “inside of the box”; the CBO needs to look “outside of the box” to find options for the issues we face.

.

 

 

Note: The CBO also looked at raising the Full Retirement Age (FRA) from 67 to 70. This is a different kettle of fish than increasing (or decreasing) the EEA. This approach would benefit SS. But it would have a range of negative consequences as well. I’ll discuss increasing the FRA in a separate post. Enough on SS/CBO for one day.

 

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Sun, 01/22/2012 - 22:09 | 2087404 arg
arg's picture

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Mon, 01/16/2012 - 12:38 | 2068723 blindman
blindman's picture

http://www.veteranstoday.com/2012/01/14/weekly-intel-report-january-14-2...
Weekly Intel Report, January 14, 2012

Coverage by Press “Kabuki Bunk” and Little More
by Gordon Duff, Senior Editor

here near the bottom.
"..
IRAN, THE TRUTH
New Iranian Missile Battleship
There is no conflict with Iran. They are another “cardboard Lothario” enemy, powerless, barely able to defend their own capitol, no ability to even go “head to head” with Israel as far as deployable firepower.
The “tensions” with Iran are financial games meant to run up the oil markets, attack western currencies and allow America to continue to deploy forces to the Middle East although there is no excuse for any presence there.
Iraq, the illegal war, is over. Afghanistan is totally lost, a fiasco from day one, and oil, the commodity that was so vital to America, supposedly, is in such oversupply that the Straits of Hormuz are no longer of strategic interest to the US.
Oil oversupply has made Hormuz a joke.
Then again, were Iran to close Hormuz, their own government would fall in a week, they would starve and China, their biggest customer, would simply go elsewhere. Oil has no value anymore, the world is drowning in it and it is price at 300% of its actual value now.
We could say the US and Israel, with cooperation from Iran, are staging the current “problem.”
The truth is worse, it isn’t the nations at all but criminal organizations that control the governments of all 3 nations and many others. The entire congress of the United States is 100% controlled by organized crime.
Watching the GOP primaries is like watching Chicago during the 1920s. The Republican Party has, since Reagan, become an arm of an international conspiracy involved in human slavery, drugs, arms trafficking and terrorism.
The military knows this, the intelligence community knows this and all are at an end of their patience." ....
..

Mon, 01/16/2012 - 07:33 | 2068249 steveo
steveo's picture

Bitcheeeez!!!  OK I just wanted to say that one time....out

Mon, 01/16/2012 - 04:29 | 2068153 Tuffmug
Tuffmug's picture

Social security reform is a great divide and conquer issue pitting Old vs Young, rich vs. poor, liberals vs. conservatives. Perfect misdirection issue to deflect attention from our kleptocratic fascist state which (via accounting fraud) stole and spent the SS trust fund money and now is crying poverty and requiring us to pay (via future taxation) for those SS benefits a second time. We will squabble over pennies and benefit levels and age eligability and means tests while this massive theft goes unrecognized.

Mon, 01/16/2012 - 03:51 | 2068125 myne
myne's picture

Can you re-model this with the difference being a forced reduction in working hours across the board?

I think the sweet spot is 34 hours, and I suspect unemployment would RAPIDLY resolve itself if legislation passed forcing employers to pay 1.5x overtime to ANYONE working over 34 hours.

Mon, 01/16/2012 - 07:20 | 2068237 steveo
steveo's picture

lowered productivity will not make a more healty or weathly society.   That is silly.

Mon, 01/16/2012 - 03:23 | 2068108 Peter Pan
Peter Pan's picture

Does this mean that the Greeks were already on the right track? LOL.

 

Mon, 01/16/2012 - 02:02 | 2068017 The Old Man
The Old Man's picture

I agree that lowering the retirement age would benefit both retiries and the government in the short term, but, in reality, the small long term of the SS COLA  increases, would force the SS retired back into the workforce, thus negating some of the part time jobs the youth would call on for thier own support. I think this is already occuring.

As far as the snowflakes are concerned, I would have to call that a 50:50 proposition. I feel that at least 1/3 of them have opted for healthcare of some sort and will become a needed source of SS revenue in the furure. The remaining 1/3 I would see going into education, the physical sciences and engineering, and the remaining 1/3, the flops or snowflakes, who actually didn't want to go to further education but did so because their parents wanted it,  just getting a degree without a clue to where and when their life will start. The bottom of that 1/3,  those with or without a college or high school degree, going to the food service and trades after they found out what life is all about. And hopefully getting their shit together and making something of themselves.

But, my uncle did only tell me once, "We will always need people who know how to use a shovel.", and I'm afraid he was very correct.

SS is not a godsend and was never meant to be. It was a stipend to make certain that you had a chicken in the pot and the rent was paid. Assumptions that retired life was to be supported by the government were false. It was up to each individual to allay funds to secure his lifestyle and retirement within his means. SS was a cushion to help attain a goal.

It was not, and will never be, the goal.

During the last fifty years we have accumulated a system of financial products which were designed to aid that goal. During the last fifty years the world of finance and investing has changed so rapidly and negatively, that the prospects of secured wealth in the mind of todays' retired is left for chance. I'm not speaking of all you guys, some out there watching three financial screens all day, or you ubers trading FX; I'm talking about the Union Plumber and the Union Cashier at the local food mart. And all the non union people who pay into the 941 through their employers. You guys have some idea of what these people do but you seem so disconnected that they are fund paying members of a group that are depending on that $2.00 an hour or 6.9% which goes into a retirement fund run by a group of trustees who invest the retirement monies with a fund. And you know where that goes. 

If the system fails, if it turns out to be a ponzi scheme, then you and I have all failed. We have given up our humanity, our grace, and our dignity.

For money.

It's all about winning. Isn't it?

 

 

Mon, 01/16/2012 - 07:27 | 2068242 steveo
steveo's picture

Bullshit, some of this is on our watch, but come on, short of starting shooting, there is little we can do to influence this massive theft that is taking place.   The powers that be are deciding this is the right time to be as greedy as they can, for whatever reasons.  

BS on your altruistic finale.   The union plumber is doing fine, the small businessman is being crushed.    Anyone who still trusts the Gov or fiat currency, or "electron" wealth, is in bad shape.  

Mon, 01/16/2012 - 15:01 | 2069127 The Old Man
The Old Man's picture

Steveo. We don't have any other type of system "in place" to get out of the mess. I agree, some Union plumbers are doing fine, some are not. I was a bricklayer for 29 years. Union. I made $29 per hour with benefits before I retired. That's a pretty good middle class earning IF you can find work for 12 months out of the year. Most of us in our group NEVER worked 12 months. 6 to 8 if we were lucky. And that was including travel out of state for work. 

As you I feel the fiat debacle before us will explode at some point. The Keynesian's never had an end game scenario figured because everything was dependent on growth. Preaching to the choir, I know; but when are we as an electorate going to DEMAND that some other system be developed and evolved into the economy. Shortly I'd say. Before the shooting starts and the guillotines are erected. Although the Latter would be more effective. 

And to end my particular dilemma with being unemployed 4 to 6 months out of the year, I started my own company. I did pretty well but I understand the small business owner being crushed. That's just one reason I terminated the business after 10 years of successful operation. The rules and regs were getting outrageous. And trying to keep employees for longer than a year was ridiculous, even with all the perks. I decided that after working 80 hours a week for 40 hours at scale was just a bit too much to handle.

I think you understand. I do not trust either. Everybody has a different personal story. That's my perspective.

Sun, 01/15/2012 - 23:10 | 2067774 frostfan
frostfan's picture

It's nice to read a though provoking article at Zerohedge without invoking some kind of evil conspiracy.  Interesting that the math assumptions support the government telling people to retire earlier rather than later.   Think of the changes of people's mindsets thinking that they can get SS at 60 rather than 62 or 67.  I wonder about the consequences of so many older people receiving less to live on however but since it's China's money......

Mon, 01/16/2012 - 00:22 | 2067901 Stuck on Zero
Stuck on Zero's picture

The real problem is not Social Security it is medical care.  By age 65 about 1/3 of all working adults have a disability.  Disability income (in all forms) is generally higher than Social Security.  The longer people stay in the workforce the more of them will be supported on the many forms of disability: workers comp, supplemental income, long-term disability, etc.  As soon as a disabled worker reaches retirement age he/she goes on Social Security for a dramatic drop in total cost.  No matter how you slice it the promises vastly exceed the ability for government to pay.

Mon, 01/16/2012 - 07:29 | 2068243 steveo
steveo's picture

Consider the radical crap the gov has already done....once you go on the dole, you are a non-citizen, your vote doesn't count.  

 

Anything is possible.   THEY will do anything to keep their power and privledge.

Sun, 01/15/2012 - 22:10 | 2067626 RoadKill
RoadKill's picture

Who the hell gave humans the right to do nothing for the first and last 18 years of their life? Actually now days it's the first 25 years (after snowflake gets done pursuing a worthless masters of fine arts) and the last 25 (retire at 62 and live to 87).

If you live to 90 that's 788,000 hours. Avg person works 2,000 hours a year = 80,000 hours from 25-65. So precious little snowflake thinks they can work just 10% of their life and still have a McMansion, 5 flat screens and 3 cars?

Sun, 01/15/2012 - 21:42 | 2067555 satan2liberals
satan2liberals's picture

I'm sorry but I've never heard the problem framed this way.

It's not "the early retirement age" that is the question.

 

The question is " At what age is full retirement benefits available " upon which early or late retirement benfits are calculated. 

 

 

Lowering or raising early benefits is simply rearranging deck chairs on the titanic that only bean counters could get excited over.

Sun, 01/15/2012 - 23:41 | 2067828 pavman
pavman's picture

I think the point is that by raising the retirement age, it keeps more 'youth' unemployed longer as the age differential offsets any front-end benefits to later retirement coming off the back-end.  It also increases the burden on businesses as a seasoned person is much more expensive than a greenhorn.

Plus it seems to reason... older, mature workers will not be out looking to start a family, buy a starter home, and spread that income out quickly...rather, they'll be looking at saving for retirmenet since its imminently on the horizon.

A friend of mine told me at the company he works for its almost like they're making up jobs to help boomers stick around longer, rather than shedding the heavy weight and allowing Gen Xers to move up the ladder.  Makes no sense unless you're in the sympathetic, hippyesq cohort.

Sun, 01/15/2012 - 22:51 | 2067725 covert
covert's picture

the ideal behind social security was invented by communist in russia to trick americans into accepting social distribution.

http://expose2.wordpress.com

 

Mon, 01/16/2012 - 01:36 | 2068001 Pay Day Today
Pay Day Today's picture

Americans already accept social redistribution - the 99.99% being milked by the top 0.01%.

Sun, 01/15/2012 - 21:17 | 2067492 blindman
blindman's picture

an entity, conscious, confronts a limit. it is either
rewarded or discouraged, ignored at said limit. if rewarded
conformity to prior condition response conditions become
experiential knowledge or wisdom. there ya' go. thinking
outside the box is for outcasts, aka the discouraged.
they have developed a thick skin and are glad to leave the
newly challenged their day in the gutter. best of luck to
all the recently exposed to tyranny. thinking outside the box
is only for those with no other option, otherwise the box is
very nice and safe. good
normally outside is not good, or bad.

Sun, 01/15/2012 - 20:29 | 2067336 gwar5
gwar5's picture

Reality: The solution will be to deny payments and break the socialist promises made by the creditcard Keynesians. Done by inflating away obligations through debasement of the currency and assuming that the people are just too stupid to know the upcoming Iranian war is just a scapegoat to deflect the failure of central planning. We're all Chinese creditors now.

 

Thomas Sowell: "Socialists are liars and charlatans using the oldest trick in the political book, telling gullible people what they want to hear, which is that they can get something for nothing."

Anonymous: "You know when socialism is about to fail again when the statists ready for themslves for another crackdown against dissent just before they announce all the promises are going to be broken."

 

Sun, 01/15/2012 - 20:19 | 2067308 Diamond Jim
Diamond Jim's picture

you forget...there is no money in SS....all that are left are IOUs. Now i sure as hell don't want any IOUs for my monthly. Where's the $$$

Sun, 01/15/2012 - 18:42 | 2067095 Waterfallsparkles
Waterfallsparkles's picture

The biggest problem with Social Security is that so much of the Money has been spent on Welfare Recipients and Medicade.  Many of these people never paid one penny into the system.  Yet, it takes Money away from true Retirees that paid into the system for their entire lives.

Mon, 01/16/2012 - 07:31 | 2068247 steveo
steveo's picture

"true retirees" LOL

Sun, 01/15/2012 - 18:18 | 2067059 Waterfallsparkles
Waterfallsparkles's picture

The Government does not want anyone to retire early.  Because they have to start to pay them at early retirement.  There are so many that die before Retirement and the Government gets to keep all of the Money that they paid into the system without ever having to pay it out in Benefits.

Also, when people retire they stop paying taxes into the system which reduces the amount of Money the Government has to spend and the Money going into the SS Trust Fund and Medicare.

If you add up the savings of the Government from not having to pay benefits to early retirees and income they receive from taxes, and deductions for SS and Medicare from workers it would be a sizable sum.  Not including the amount of people that die before collecting.

The odds are in the Governments favor that the Beneficiary will die the longer they work.  Especially with the stress in the work place today.

Sun, 01/15/2012 - 18:02 | 2067041 Don Levit
Don Levit's picture

The money is segregated in an accounting sense, not for budgetary purposes.

All of the FICA dollars go into the Treasury's general fund, just like income taxes.

A case can be made, however, that the current FICA payments pay for current benefits.  In that case, one can say the FICA taxes are "dedicated revenues," although, in reality, they are dedicated only in an accounting sense, not a budget sense.

And, it is the overall budget approach that is more meaningful, than an accounting approach which features the illusion of a store of wealth.

The interest that was looted from the trust fund was unfunded, accounting interest, from unfunded Treasury debt.

The excess principal that was looted from the trust fund could be seen as real dollars, assuming one takes the approach that the excess FICA dollars actually went into the trust fund, and not the Treasury's general fund (in actuality, the excess FICA dollars DID go into the Treasury's general fund).

From a budgetary standpoint, the entire remaining proncipal and interest of the trust fund is illusory, for all of it (principal and interest) was looted to pay for current expenses and lower the deficits.

Don Levit

Sun, 01/15/2012 - 16:55 | 2066903 Dirtt
Dirtt's picture

Bruuuuuuuccccccce!   How in the hell are they going to confiscate people's IRAs if they let them retire earlier?

Once the HIRE Act and other capital controls run their course - and they will (savvy capital & connected lawyers always find a way) - what is next?  The BIG FAT SLUSH FUND are retirement accounts.  The longer it takes for people to retire the harder it is for them to exit said IRAs.

Buying time by raising the retirement age is all part of the game plan.  The only question I have is does it happen before or after they confiscate gold. I'm thinking after.

Sun, 01/15/2012 - 18:22 | 2067069 Waterfallsparkles
Waterfallsparkles's picture

Interesting point.  The longer the Governement delays Retirement the longer people have to keep Money in their 401K.  Which in itself props up Wall Street.

Sun, 01/15/2012 - 16:17 | 2066792 non_anon
non_anon's picture

hey, the central planners just want us to know they care for us

Sun, 01/15/2012 - 18:33 | 2067081 sun tzu
sun tzu's picture

In Government We Trust

Sun, 01/15/2012 - 16:16 | 2066791 Careless Whisper
Careless Whisper's picture

Your analysis doesnt take in to account the lost tax revenue to the gov for the early retirement, perhaps because you assume that every retired worker will be replaced by a new worker (in the USA). I think thats a big flaw in your model.

Sun, 01/15/2012 - 15:26 | 2066698 masterinchancery
masterinchancery's picture

I would be willing to give up all my social security and medicare benefits, which are substantial, if the Federal government would get the hell out of my life.  The apparatchiks will never do that deal, since their primary objective is to control everyone's life, they don't give a crap about finances. 

Sun, 01/15/2012 - 19:41 | 2067211 Gully Foyle
Gully Foyle's picture

masterinchancery

"if the Federal government would get the hell out of my life"

No more highway driving for you eh?

Sun, 01/15/2012 - 22:56 | 2067738 penisouraus erecti
penisouraus erecti's picture

wtf - with all the tolls and taxes I pay for the privilege of driving on shitty pot-holed roads I'd go for that.

Sun, 01/15/2012 - 21:37 | 2067537 satan2liberals
satan2liberals's picture

We already have a pay for use system for highways it's called "gasoline tax" you pay it at the pump .

 

But nice try anyway.

Sun, 01/15/2012 - 15:56 | 2066747 Thorny Xi
Thorny Xi's picture

Yeah.  right.  you're what?  22?  Don't worry sonny, by the time you're old and tired, there won't be any government left that you might recognise.  Lowering the EEA would clear a lot of jobs and advancement for youngsters like you who are looking for work. 

Sun, 01/15/2012 - 18:35 | 2067082 sun tzu
sun tzu's picture

there won't be any government left that you might recognise. 

 

I'm shaking in my boots now

Sun, 01/15/2012 - 19:44 | 2067216 Gully Foyle
Gully Foyle's picture

sun tzu

 

"I'm shaking in my boots now"

Only a moron doesn't think shit will get much worse.

Your neighbors could kidnap you and spend their spare time assraping you.

And all because there was no law to protect you from kidnap and assrape.


Sun, 01/15/2012 - 22:59 | 2067747 penisouraus erecti
penisouraus erecti's picture

well, if the your friend the gubmit didn't "protect" me by taking my gun rights away at every chance, nobody would be assraping me brother........me thinks you'd actually like that though.

Sun, 01/15/2012 - 22:27 | 2067680 lunaticfringe
lunaticfringe's picture

I don't need government or laws to protect me. Just me and my little armory. Fuckers.

Sun, 01/15/2012 - 15:12 | 2066666 RolloTamasi
RolloTamasi's picture

All the social engineering types must give it a rest. The greatest waste in life is the retiring of people who possess skills that are still needed. Just like Cash for Clunkers was a colossal failure, having people with a lifetime of valuable skills retire to make way for someone new is just idiotic. Why get rid of an "asset" that still has value? The heart of the matter is that people don't take care of themselves and their future liability to society will bankrupt the country. Forget SS, look at future and current medical expenses on people who for the most part do NOTHING to take care of themselves. Bruce would be better off REQUIRING everyone to take a 1/2 hour walk each day and RESTRICT the consumption of high glycemic foods. This would do more to increase human efficiency than his retirement plan solution. We are in this situation for one reason and one reason alone "WE ARE LAZY" Get rich quick, take a pill, no money down........ all short term solutions with long term negative effects in the majority of cases.

PS Maybe passing out cigarettes would be better. I remember reading somewhere that despite the medical cost, their dying early is actually a net plus from a dollar and cents point of view. 

Mon, 01/16/2012 - 04:29 | 2068152 John_Coltrane
John_Coltrane's picture

Thank god you wrote what I was thinking.  In my field, scientific research, if all the scientists in their late 50 and 60s really retired from what they love doing, there would be absolutely no mechanism for training the young ones.  Older people with skills and experience are an incredibily important resource for a socieity and the only reason they should spend their time playing golf is exercise.  (Its called a good walk spoiled for a reason!)

Our society is lazy and indolent for a reason: the abdication of individual responsibility.  Restoring this sense and making the entitlement mentality a object for derision should be a prime goal of all parents and the educational system. 

You only neglected to mention a good hour of daily exercise would eliminate most high blood pressure and depression prescriptions.  We need a good body mass index tax (and I hate taxes).

Mon, 01/16/2012 - 00:54 | 2067944 GMadScientist
GMadScientist's picture

I prefer randomly distributed IQ testers with incinerators for the 'do not pass' applicants.

Would the economy still function if people had to pass a quick quiz on the exponential function before being allowed to sign a loan document?

Would testing for B-12 deficiency and the presence of transfats be ethical?

Sun, 01/15/2012 - 15:19 | 2066680 hooligan2009
hooligan2009's picture

thats why i smoke :) ...social commentators might say that those in the cohort behind the retirees are just as good and are "fresher", its a rollon on rolloff thing

Sun, 01/15/2012 - 15:05 | 2066652 GeezerGeek
GeezerGeek's picture

In a subsidiary post (2066237) Mr. Krasting writes the following: "Let legislators frame legislation that achieves the desired objectives."

The way I see it, far too many of the posters seem to think that legislators really know how to achieve desired objectives and that those objectives are actually for the benefit of the average person rather than for the benefit of the legislators and their buddies. Hell, why bother to have legislators? They always seem to have conflicting ideas, anyway. Let's just give Obama his wish and make him dictator! Surely he and his czars and czarinas can come up with their own set of desired objectives more easily than any legislature!

What, you say you don't like Obama's objectives? Tough! We've got a FEMA camp waiting for your arrival.

In fact, top-down solutions work just as well when they come from government as when they are dictated in corporations. They don't. That's why I prefer the free market, where individuals make millions of decisions that adjust the functioning of the economy, rather than the (generally inflexible) mandates from above. Let me try to set and achieve my personal objectives. All the government needs to do is protect us from the depredations of one another.

Sun, 01/15/2012 - 15:12 | 2066664 hooligan2009
hooligan2009's picture

you mean the Marshall Plan was a failure? hmmm

Mon, 01/16/2012 - 02:42 | 2068053 Tuffmug
Tuffmug's picture

Of course the Marshall Plan was a failure. It enabled the creation all the bankrupt socialist European states which are about to collapse and take everyone down with them.

Sun, 01/15/2012 - 18:37 | 2067091 sun tzu
sun tzu's picture

Nobody knows if it was a failure or not since no other alternative was given a chance. The schools have taught you that it was a huge success and you bought into it. hmmmm

Sun, 01/15/2012 - 16:02 | 2066639 hooligan2009
hooligan2009's picture

seems like the same kind of logic that would say the more indebted a nation the longer its life expectancy...exactly why do japanese live 5 years longer than americans (83 years v 78), or italians 3 years longer (81)? and do we actually want people to live longer? i would say let them die younger if you are a krugmanite economist or an investment banker...yes you do if you are a human being..and if you are a human being, are politicians liable for lowering living standards and the quality of life by this median death age comparison? 

http://www.nationmaster.com/graph/hea_lif_exp_at_bir_tot_pop-life-expectancy-birth-total-population

if i move to monaco will i live ten years longer and will the US government pay me for those extra ten years?

oh and dont click the link for % in poverty for the US, its jumped somewhat (about the same as morocco) in the last seven years:

 http://www.upi.com/Top_News/US/2012/01/12/Rich-poor-conflict-said-No-1-US-strain/UPI-16861326358800/?dailybrief

or the murder rate link which for some reason drops off the USA from comparisons, never mind here it is from wiki;

http://en.wikipedia.org/wiki/Crime_in_the_United_States#Violent_crime

48 per million...a few more than turkmenistan and the ukraine..(note this excludes the death rate from occupied territories like iraq and afghanistan, since deaths by the army aren't homicides).

still things can only get better because after all, we are focussing on exactly the right things!

Sun, 01/15/2012 - 14:39 | 2066591 HoofHearted
HoofHearted's picture

I'd vote for the following:

Take Social Security payments away from me for the first ten, twenty, whatever number of years. Then leave me the hell alone. I'll choose not to take any Social Security payments and leave them the hell alone. Give me the opt-out (or better yet make people take the opt-in) after I have 40 or 80 quarters of qualigying payments to this gibberish of Social Security. And make it retroactive so that I can reclaim some of the extra they have taken from me. Let me plan for my retirement. And don't make me a part of this continuing Ponzi scheme.

Sun, 01/15/2012 - 18:56 | 2067112 Waterfallsparkles
Waterfallsparkles's picture

There is a way to kind of opt out.  Buy Rental Real Estate.  You can depreciate the Real Estate and take the entire depreciation off your taxable income.  That also reduces the amount of Money you have to pay into SS and Medicare.  If you own enough Real Estate you will not have any taxable income.  P. S. At least in the initial years.  Once you start to make a profit over your Mortgage the Taxes will kick in.  But remember even in Retirement it is unearned income.

The hope is that eventually the Rents from your Real Estate will support you when you are old.  Plus, the benefit is that when you die your Heirs will inherit the Real Estate.  Where anything that you paid into SS and Medicare will revert back to the Government.

So, my young man buy Rental Real Estate.  But, please check with your tax professional before taking my advise.

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