Robert Samuelson: The elderly are better off than advertised

[alp227]

When House Speaker John Boehner calls for trillions of dollars of spending cuts, the message is clear. Any deal to raise the federal debt ceiling must include significant savings in Social Security and Medicare benefits. Subsidizing the elderly is the biggest piece of federal spending (more than two-fifths of the total), but trimming benefits for well-off seniors isn’t just budget arithmetic. It’s also the right thing to do.

I have been urging higher eligibility ages and more means-testing for Social Security and Medicare for so long that I forget that many Americans still accept the outdated and propagandistic notion that old age automatically impoverishes people. Asks one reader: Who are these “well-off” elderly you keep writing about? The suggestion is that they are figments of my imagination, invented to justify harsh cutbacks in Social Security and Medicare on the needy.

(...)

To correct the stereotype, consult a government publication called “Older Americans 2010, Key Indicators of Well-Being.” It reminds us that Americans live longer and have gotten healthier. In 1930, life expectancy was 59.2 years at birth and 12.2 years at 65; in 2006, those figures were 77.7 and 18.5. Since 1981, death rates for heart disease and stroke have fallen by half for those 65 and over. In this population, about three-quarters rate their own health as “good” or “excellent.”

“Most older people are enjoying greater prosperity than any previous generation,” the report says. Consider:

l From 1959 to 2007, the proportion of the 65-plus population with incomes under the government’s poverty line ($12,968 for a couple in 2009) dropped from 35.2 percent to 9.7 percent, which was half the poverty rate for children under 18 (18 percent).

l  The proportion of elderly living in the “high income” group — defined as four times the poverty line, or almost $52,000 for a couple in 2009 — rose from 18.4 percent in 1980 to 30.6 percent in 2007.

l  In 2007, the median net worth (that is, assets minus debts) of 65-plus households was $237,000, about twice the amount for households aged 45 to 54. Among 65-plus married couples, median net worth was $385,000.

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[Demeter]

1. Single Women Aren't

Whether widowed, or never married, women rarely commanded the wages and retirement packages of men. Their pensions were stolen by governments gone broke, or companies bought out and dismembered by vulture capitalists.

Samuelson should realize that married couples are a sometimes thing. And women are always left behind.

[grasswire]

14. don't forget the divorced older women who didn't profit from feminist gains

Millions of women were divorced in the last century due to the no-fault divorce laws being implemented. Those women did not profit from feminist gains that came to their daughters' generation in the area of education, employment, equal pay, etc. They lost ground post divorce. Now they are in early years of retirement, and are left behind again. A woman who largely deferred to her husband for household support and was then divorced is likely to only have under a thousand dollars a month on Social Security.

[Name removed]

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[virgogal]

4. He's getting his facts from a government publication and as a senior

myself I agree with the average incomes and assets mentioned in the article.

We are a lucky generation.

[Blue Meany]

3. All of this may be true, but it is only part of the story...

the generation now retired have the best retirement benefits seen at any time in our history, but those are starting to disappear as companies (and perhaps now govts.) are using bankruptcy as a mechanism to reduce or stop paying defined benifit plans to which they are committed. This is occuring just at a time when baby-boomers, who are woefully unprepared for retirment as a group, are starting to retire. This will change the picture considerably.

He is suggesting means-testing for social security and medicare, but this is really a back-door method of underminging support for them by turning them into "welfare" programs. It's another attempt to divide working people--by age, by relative income--so that they don't turn their attention to the rich.

[JDPriestly]

10. He should instead argue for estate taxes for the very wealthy.

Cuts to Social Security and Medicare for the middle class will mean that the inheritances of the children of the middle class will be reduced. The rich won't feel those cuts, but they will not have to pay estate taxes on their megafortunes.

Samuelson is not thinking far enough on this.

[ensemble]

5. well...

I want to know who qualifies as "wealthy" and able to afford reduced benefits. If we are talking about multi-millionaires, OK, but if we are talking about seniors worth a million or two million, its possible they accumulated that wealth by a lifetime of disciplined saving while paying full payroll taxes. Cutting their benefits would be a disincentive to save in their working years.

[Kolesar]

7. $52,000 income/couple is "high income"

I suppose that those retirees and up will have to sacrifice benefits. $52k sounds pretty humble to me.

[Faygo Kid]

6. I commented already at WP. Here's what I wrote.

Whatever happened to "shared sacrifice?' The "elderly" should sacrifice, but hedge fund managers should not give up their 15% top tax rate? Those making $250,000+ should not have their Bush tax cuts over that rate rescinded? The oil companies should not relinquish their taxpayer-paid subsidies? Older Americans I know are more than willing to do their part, but the emphasis should be on "shared." The burden should not be placed exclusively on the middle class, older Americans, those on Medicaid and students. But as usual, they will be expected to give through sacrifice, and the K Street funders will also as usual take their share. Same old shell game from Samuelson. Attack those who are vulnerable and call them well-off, engage in generational warfare, and give a pass to those with the most - and the most influence.

[JDPriestly]

11. Samuelson's issues could better be handled by increasing the estate

taxes on the very wealthy. That would take care of the whole thing.

[Enthusiast]

17. I would vote for that. nt

[Curmudgeoness]

8. It is probably true that there are a large number of seniors

who are in good financial shape. I know several of them in my small town. Many who are able to live in Florida for the winter. These people were very fortunate to have lived at the times that they lived. There homes were affordable and escalated in price quickly. They were at the time when you were in your savings mode (children grown and house paid off) that the interest rates were substantial and the stock market grew. They worked for companies where they had defined benefit pensions. Wages grew faster than inflation most years of their working lives.

There are still a high proportion of the senior population who are not in this category. And since they are unable to continue to work, they have no way to get out of their positions anymore.

Things are not the same today as it was for the previous generation. Increasing the age to retire and means testing for SS/Medicare will only make our condition more dire than I fear it is already.

[JDPriestly]

12. There is a huge difference in the situation of the over 70s and the under 70s.

The under 70s and many around 70 do not have private pensions as generous as those of the slightly older generation. And it is going to get worse.

And so many people 50+ lost their homes to foreclosure in the past few years.

Samuelson is wrong. He should be supporting estate taxes for the very rich.

Cutting Social Security and Medicare benefits will mean that middle class kids do not inherit from their parents who will spend their savings just to live.

Just going to visit their children is an expense that many seniors cannot afford.

[JDPriestly]

9. This may be true for people in their 80s and 90s.

But it is not true for people in their 50s and 60s, those of us who have recently retired or who are now retiring.

There is another catch in these statistics. A relatively small portion of seniors who have acquired great wealth, say by selling their interest in a company or a firm at retirement, really have a lot of money. Most of the rest do not.

Further, if you own a house that you live in, your assets may well be over $200,000. But you live in the house. That means that you are not dependent on government assistance beyond Social Security to pay your rent. Samuelson is simply wrong.

Seniors who have pensions that pay more than Social Security are doing OK. But most of the seniors retiring now, and most who will retire in the coming years do not have generous pensions or pensions at all.

And while many of us could be working, few of us have the energy and speed that employers now require in the workplace.

The irony is that a guy like Samuelson will argue that the extremely rich should not have to pay any estate taxes, but is quite willing to support cut-backs in Social Security that will force middle class seniors to spend the money that would otherwise go to their children as an inheritance on living expenses just to survive. By advocating for cuts to Social Security, Samuelson is actually supporting a shift of the burden of the amounts that the very, very wealthy should be paying in estate taxes to the living elderly.

I support estate taxes for the very wealthy, not Social Security cuts for everyone else.

[jtuck004]

13. Average? If Bill Gates walks into a bar everyone's average income

rises, even if the others can't afford to pay their heating bills.

Over one-third of people in this country retire with nothing - nothing - for an income except Social Security. The fact that "Indeed, half the nation’s wealth is owned by people 55 and older" doesn't say much in a country where 20% of the people own 87% of the assets. It is also curious that their stats don't seem to reflect the damage done in the past 4 years.

http://www.retiredamericans.org/system/storage/24/58/0/269/factsheet-social_security_2010__facts_and_figures.final.pdf

Higher ages for retirement mean millions of people will try to live longer with no food, housing, or income, and no way to get it. The BLS Jolts survey says there are 7 people looking for every job opening. Unless this is fixed first, (and we haven't even started fixing it as long as the majority of job openings are low-wage service jobs - see April BLS survey - anyone that implements any reduction not based on income is going to consign many of our most vulnerable to conditions that most states won't even let you keep a pet in.

So, sure, let's save some money on SSI. Just tell us who is not important, how worthless they are. Just state how many people you want to live longer in poverty, or die homeless or hungry, because that will be a direct result of such a unilateral policy against American citizens.

[jtuck004]

15. Disparities.

Abstract

The rapid growth of household wealth in the United States has been accompanied by
drastic growing inequality. This paper discusses both wealth and inequality growth, examines
demographic factors behind the growth, and analyzes housing’s role in it, using the Survey of
Consumer Finances data collected by the Federal Reserve Bank. While aggregate household net
wealth grew from $25.9 trillion in 1995 to $50.1 trillion in 2004 (both in 2004 dollars), nearly 90
percent of the net gains occurred only among the top quartile of households in the wealth
distribution. Although housing wealth (both home equity and housing value) was still more
evenly distributed than other types of wealth, it largely served to widen the wealth gap rather
than to narrow it during the last decade.

http://www.jchs.harvard.edu/publications/markets/w07-1.pdf

It really doesn't matter how long you live. If you are 58 and unemployed today, chances are you will be unemployed for the next 4 years, the first opportunity you will have to collect a portion of the SSI you could claim. A full one-third of people at that age have no income, and will have none until SSI begins.

From the study cited in the OP

"In 2008, 39 million people age 65 and over lived in the United States, accounting for 13 percent of the total population. The older population grew from 3 million in 1900 to 39 million in 2008. The oldest-old population (those age 85 and over) grew from just over 100,000 in 1900 to 5.7 million in 2008.

The baby boomers (those born between 1946 and 1964) will start turning 65 in 2011, and the number of older people will increase dramatically during the 2010–2030 period. The older population in 2030 is projected to be twice as large as their counterparts in 2000, growing from 35 million to 72 million and representing nearly 20 percent of the total U.S. population."

____________

Thank you for the post.

[Enthusiast]

16. Considering the fact

that a large part of these seniors own a home this figure is hardly an indication of extreme wealth.

"In 2007, the median net worth (that is, assets minus debts) of 65-plus households was $237,000"

[txlibdem]

18. That article could have been written by Newt Gingrich with no changes

Pure right wing talking points.

Using "median income" and "median assets" is a great way to paint the poor and desperate as "not so bad off" by including the assets of Warren Buffet, Bush Sr., and other wealthy seniors in those numbers.

me·di·an in·come
The median household income is commonly used to provide data about geographic areas and divides households into two equal segments with the first half of households earning less than the median household income and the other half earning more. .... More »
en.wikipedia.org/wiki/Median_income

From the article:
"Older Americans also fared better in the recession, a 2009 Pew survey found. Among those 18 to 49, 68 percent reported that they “cut back spending” in the past year; for those 65-plus, that was 36 percent."

Perhaps the current retirees had already been forced to cut back as much as humanly possible... and only 36% of them had anything left to cut. That proves that the elderly are too poor, not too rich. The article is chock full of right wing idiocy such as that: manipulating numbers to turn lies into talking points.

Zero credibility to the article and the original poster.