Thursday, February 17, 2011

reality check-- senior poverty

Since my post from the other day, I have read emails, comments, and blog posts that are essentially proving my point: there has been a lot of vague, anecdotal insistence that Social Security cuts won't hurt anyone. Sorry, but no: 8.9 percent of American seniors-- 3.5 million people-- lived below the poverty line, in 2009's numbers. The poverty line for an individual senior citizen in America, as calculated by the Census Bureau? $10,289. For a year. For a two person householder, it's $12,968. (You think the average professional journalist or pundit spends more than that just on entertainment in a year? I'm guessing yes.)

So those who want to talk about how they "look around and see rich old people" might want to catch a clue and look at the data. And these figures are to say nothing of the vast number of seniors who are technically above the poverty line but barely scrape by. So what, exactly, are you proposing, Serious Blogger? Serious Journo? Have the guts to confront the consequences of your policy preferences.

What's so galling about all this is that it is precisely an inversion of what those calling for harsh cuts but naming no victims say the situation is. They say people who aren't showily demanding deep cuts are being unserious, and that they want progress without pain. But if you refuse to say who you're going to be hurting when you call for these cuts, you are unserious. You are calling for progress without pain. You don't get credit for your toughness if you are shielded from what makes the choices tough in the first place. You don't get to talk about austerity when your own lifestyle is so far from austere. And if you want to be serious, you start by actually looking at ugly reality.

Update: Updated the post to include newer figures.


heterodoxthoughts said...

Thank you so much for point this out. I am so tired of the vacuous jerks in our media and political classes (people who don't do actual manual labor, like many retirees did) call for benefit cuts, increases in the retirement age, etc. First of all- there is no major actuarial problem with social security. And, if you really want to ensure future health of the system, lift the damn payroll tax cap. But I guess that wouldn't be serious enough. Ugh.

Joshua A. Miller said...

You're still using the wrong figures. You should be looking at "Definition 15" from here, which is post-tax and adds transfers, cap gains, and imputed income from home equity:

For seniors, you're looking at about 4%. I think you're pointing to an important piece of the puzzle, though, and we shouldn't ignore them. But that still leaves about 11% of seniors making more than 100k a year after taxes and additional income.

TheRadicalModerate said...

Are you thinking that social security is a retirement program? It certainly wasn't envisioned that way. When enacted, the age for eligibility was 65, at a time when life expectancy was 59.9 for men and 63.9 for women. The goal of the program was to care for people who were too incapacitated to continue working, not to provide for otherwise able-bodied people who had reached an age where they deserved to take it easy.

Today, average life expectancy is 78.3. What's the average age where one is unable to work now? 70? 72? So why shouldn't the vesting age for social security be indexed to that age of incapacity, instead of being enshrined in some art deco fever dream from the 1930s?

As for Medicare, there's a fundamental technological problem that is only going to get worse: When Medicare was created, the medical ability to extend the life of the elderly was almost nil. You got your threescore and ten and that was it. Since the marginal cost of life extension was effectively infinite, everybody was fine with the idea that the elderly would die before the government ran out of money for their medical care.

That's no longer true. The marginal cost of life extension is now, for a certain number of extra years of life, ruinously large but decidedly finite. A reasonable extrapolation would indicate that the number of years you can extend somebody's life is likely to increase faster than the cost for that life extension can be reduced.

In short, a leading cause of death in the future is likely to be lack of financial resources, rather than something that's incurable. So it doesn't really matter whether we're going to wring our hands over grandpa's untimely demise because nobody would pay for his brain transplant--we're all going to be broke long before that.

Medicare benefits must eventually be capped. I'd rather put those caps in place now and get everybody used to the idea that immortality--or even living to 110--isn't a basic human right, secure by government largesse. This is not only sound fiscal policy; it's also a sound moral policy as well. Governments shouldn't be in the business of promising their citizenry things that are impossible to deliver.

Jay said...

Ok, but would you be opposed to means testing? A lot of conservative pundit types have argued for this.

Freddie said...

No. I support means testing.

Adam said...


You said in your previous post:

"It goes both ways, though. Me, I'd like to see our insane military budget cut severely, and you start by pulling almost all of the troops out of the 155 countries we have them currently stationed in. But the defense industry employs a lot of people.... That's the problem with austerity measures; they kill jobs. I hope the people asking for these sweeping budget measures are ready for 12%-15% unemployment...."

Are you saying cutting the defense budget will drive unemployment to 12%-15%? And if so, then since you're calling for that, aren't you one of "the people" who needs to be "ready for 12%-15% unemployment"?

You've sort of risen to your challenge here in identifying the losses that would result from your cuts, but then you pin that hardship on other people in the end. If this is seriousness, should you own the hardship your policies will cause and say that you are ready for 12-15% unemployment?

Freddie said...

Not military cuts alone, no, but an admittedly half-assed estimate of the kind of unemployment we'll be facing if government massively scales back. Government, federal and state, employs a ton of people.

Now, me, if you really want to know, well-- I'd opt out of this system of resource distribution altogether. But I'm a kook.

Anonymous said...

Thanks for pointing out the human costs; I've always appreciated your effort to point out the consequences to real people of the neoliberal slogans that everyone seems in love with. It's pretty disgustingly ironic the situation we find ourselves in. The financial industry helps pump up a massive asset bubble, it pops, the world economy crashes, demand evaporates, revenues go down, deficits go up. And the apparent answer to this conundrum is to cut assistance to the most vulnerable and not to impose any kind of cost on the people responsible for the crisis. People gave Naomi Klein a lot of shit for the Shock Doctrine when it came out, that she was some kinda tinfoil hat-wearing conspiracy theorist, but it's actually quite true - our ruling financial elites will seize on any social crisis, whatever its nature or causes, to insist that the government enrich them further and shift costs and burdens from them to those less able to bear them. To hell with them, and to hell with anyone who wants to play this game with them on their terms.