Turkey Day Debate: Stimulate the Economy? Lower the Retirement Age to 55 Now (from Hartmann)

[NightWatcher]

Help me find the negative side of Hartmann's argument, because I dont see one. Oh, and I'm sorry if I missed the original debate back in August.

The rw'ers in my family are just so willfully, no wait, gleefully ignorant, and they have no answers only criticism. They have decided one of two solutions to the jobs crisis that we are facing. 1. I've got a job, so there is no crisis or 2. damned brown people. Oh I forgot #3. we need to return to God.

http://www.commondreams.org/view/2009/08/24-7
Published on Monday, August 24, 2009 by CommonDreams.org
Want to Stimulate the Economy? Lower the Retirement Age to 55 Now!
by Thom Hartmann

One of the most powerful forms of stimulus we could apply to our economy right now would be to lower the current Social Security retirement age from the current 65-67 to 55, and increase the benefits back to where they were in inflation-adjusted 1960s dollars by raising them between 10 to 20 percent (so people could actually live, albeit modestly, on Social Security).

The right-wing reaction to this, of course, will be to say that with fewer people working and more people drawing benefits, it would bankrupt Social Security and destroy the economy. But history shows the exact reverse.

Instead, it would eliminate the problem of unemployment in the United States. All those Boomers retiring would make room in the labor market for all the recent high-school and college graduates who are now finding it so hard to find a job.

If enough Boomers left the job market, it would even flip the current dynamic of too-many-people-chasing-too-few-jobs upside down, and create a tight labor markets. Tight labor markets drive up wages.

And as wages go up, tax revenues – which are paying for Social Security (among other things) – would increase.

[LWolf]

1. The negative side?

I can't afford to retire.

I cashed in my retirement fund to do my student teaching, so I don't have many years in that.

My 401K took a beating, and is now worth very little.

I bankrupted myself rescuing my grandson a few years back; he survived, and is now thriving, but my good credit and assets are gone.

I'll probably die at work, because I don't see how I'll ever be able to afford to retire.

[Odin2005]

2. It would bankrupt Social Security.

[Zynx]

6. Exactly. This is a poorly considered idea.

[NightWatcher]

7. as wages go up, tax revenues would go up, wouldnt that mean more for SS?

[TwixVoy]

9. Explain why wages would go up

Let's just assume for a moment most people 55+ could afford to retire. (which they can't, but that's another story) You would have a bunch of people 55 and over leaving the work force.

Assuming for a moment that ALL of those jobs would be filled (I believe a lot of them wouldn't be as a cost cutting measure, but let's just say they are) they would be filled by much younger people with MUCH less experience.

What does young+much less experience mean in the private sector? MUCH LESS starting pay than the person before you with decades more experience.

So explain again how wages would go up?

[B Calm]

16. Less people in the labor force can demand higher wages. . .

[RUMMYisFROSTED]

15. Not if you uncapped FICA.

[MadHound]

3. Because most people's lives have been planned and structured around retiring at sixty five

Or later. You make them retire now, and they fall back on assets that are really quite low. Most still have a home to pay off. Most will have their careers, and earning capacity cut off short, at the highest moment in their lives.

Sorry, but this is a bullshit idea

[NC_Nurse]

4. Sounds interesting, except I know in my field their would be a real problem.

The average age of nurses is late 40's. Their would be a huge shortage and brain drain without us older nurses. It takes
a while to get the experience necessary to be competent and good mentors with knowledge to share. I learned so much from
nurses who were in their 60's and still practicing when I started.

overall, though, I see the benefits of the idea to help open up fields for younger folks and the mandatory vacation idea sounds good to me.
I think the health of the public would be greatly improved if we had vacation, sick time, and benefits for EVERY job.

[treestar]

5. Exactly why ditch experienced people for inexperienced people

Overall efficiency would be lowered. And we can't have nurses retiring, we don't have enough of them even now.

[exboyfil]

8. I bet if you run the numbers you will find that

S.S. withholding would have to increase dramatically, and I would think individuals would be insane to rely on the government for payments the next 30 years (until 85 as an average age for death). I would be tempted to advise my daughters to leave the country once their education is complete because the payroll burden would be too great to ever have a normal life.

I think it would just speed the process of outsourcing jobs etc and lead to less income available to S.S. Those replacing the 55 year olds will not make nearly as much. Granted the critical fields will get bid up, but that will just lead to more outsourcing/offshoring/H1-B Visas.

I would love to retire at 55 (only 8 years away). Heck I would love to see my labor wage bid up for the next eight years, but I am not dumb enough to think that it would be in anyway sustainable.

[B Calm]

14. ... you really need to stop listening to RW radio

[exboyfil]

17. The proposal was to decrease the retirement age

to 55 from 65/67 (12 extra years of payments) and increase the amount by 10%. This year S.S. paid out more than it received (only increasing the trust fund through Treasury interest on its holdings). Before the recession S.S. (including the Trust Fund payments) was projected to be out of money by around 2042 and needing to cut benefits or increase taxes. It is now 2037, and this is with assuming a 65/67 retirement age and current benefits.

Where will the money come from? I contend it would require doing something radical like increasing the payroll tax dramatically (this does not even include the increase in general revenue taxes or reduced spending to pay back the Social Security Trust Fund). Removing the cap from S.S. withholdings would bring in about $100B/yr? (which I approve of doing).

I like to hope that S.S. is sustainable without upsetting this apple cart. An extra 10-12 years of payments for virtually everyone between 55-65. This is on the order of an extra $400B per year (assuming 26M in population group and $15,000 per recipient). The trust fund is currently about $2T so it would be depleted in 5 years with this change, and that $400B/yr would have to come from additional issues of Treasuries today.

Leave S.S. alone. Find jobs with another approach.

[Jim__]

10. I'd retire. But my company would replace me with someone in India or China.

They don't hire in North America anymore. So, my retirement wouldn't benefit anyone in the US.

[WillowTree]

11. Sure. Because people over 50 are pretty much useless anyway, right?

[old mark]

12. I retired at 57, but it was a real fluke. I had some realy ridiculously good

luck with some investments, had severe medical problems, and them came into some other money unexpectedly. I had been planning on working till at least 62 at a place I totally hated, so when we found we could live modestly on what we had, I retired as soon as possible. The stock market was still high, and my investments went into a savings fund. If I had stayed till 62, my invested money would have been gone with everyone elses.

Personally, the idea of "making" people work till a certain age is repellant and offensive to me...I thought we were individuals. I have had enough shit in my working life and I'm having no more in my free years.

mark

[B Calm]

13. I'm almost 59 and would love to retire and open my job to a younger person!

As always, Thom Hartmann makes too much sense. . . for people to get it.

Recommended!

[shanti]

18. timely post

as i will be 55 next november AND retiring the following month. another opening for someone else!

[Cessna Invesco Palin]

19. Why stop at 55? Why not 45? n/t

[RUMMYisFROSTED]

20. 35?