Class Warfare Blog

April 25, 2017

They Are Just Better Than Us … and Getting Betterer

Filed under: Economics,Morality — Steve Ruis @ 10:40 am
Tags: , , ,

Notes on How the Class War is Going (Hint: You Are Losing Worse, Much Worse.)

According to an article in Bloomberg News: “… the poorest fifth of 50-year-old American men can now expect to live just past 76, six months shy of the previous generation. The richest 50-year-olds should make it almost to 89, seven years longer than their parents’ generation.

The richest people in the U.S. aren’t just getting several years of extra life, they’re also reaping a financial reward for their longevity – courtesy of the U.S. taxpayer. These trends will be crucial as the new administration and Congress consider any changes to Social Security, Medicare, and other programs. Even tweaks to these programs, from the retirement age to benefit formulas, could affect the rich and poor very differently.

Three decades ago, the richest and poorest retirees could expect about the same amount of benefits out of government programs. The richest generally got larger Social Security payouts, both by qualifying for higher checks and by living longer. The poorest got more out of other programs, such as Medicaid and Social Security disability insurance. Medicare offered about the same benefits to rich and poor.

If you believe that “things just keep getting better,” as I used to, I think you have to expand your thinking to see for whom they are getting better and for whom they are getting betterer, much betterer.

And if you think this is happening by accident, think again. Consider just the attempt to raise the retirement age of Social Security to the age of 70. This would reduce the average number of years of payout for that lower cohort to six years (zero if you are Black) but wouldn’t negatively affect the richer cohort much at all. But it would forestall the most commonsense argument: removing the cap on Social Security wages, currently at $127K and change. So, if you make millions of dollars, you pay SS tax on the first $127K and then nothing on the rest. Removing that cap would dip significantly into the pockets of the rich, something making foregoing five years of SS income pale in comparison. This is why the rich want that solution (age 70 for benefits) rather than the cap removal. So, now you know why such a poor solution to any SS problem gets so much ink. (They own the news media, too, don’t you know.)

If you don’t believe there is a class war going on, it doesn’t matter, you are still losing.

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