This is what makes me crazy. Robert Rubin has a piece up today at nytimes where he essentially argues the tax rates on the uber wealthy have to go up, but he manages to slip in something about how entitlements must be reformed at some point. Obama and many Democrats seem blind to how alarmingly cruel it would be to reform needed benefits from what are already, as you say, stingy programs. I don’t understand it at all. These are all people who have traveled the world enough to know our social security is extremely meager by comparison to the retirement programs in other countries. Ours covers about 28% of the cost of retirement, while most other countries offer social programs that cover 70% of the cost of retirement. We should be reforming social security by doubling it, not cutting payments.

1. Lower the Social Security and Medicare retirement ages to 55 for the duration of the Jobs Emergency.
2. Pay for this by eliminating the cap on Social Security payroll taxes.
3. Continue expanding Medicare eligibility by a decade each year until everyone — most of them healthy Americans — is eligible.
4. Double Social Security benefits over the next decade with a 10% increase every year.

Right again, Jon. The pension system is bad and getting worse. 401ks just don’t cut it. They are not enough and the fees for managing them are worse. There is another problem. They are like a tax as they take money away from people that would otherwise be spent in the economy. That causes a drag on the economy. Maybe you could ignore that if you thought they were paying you more. But if you believe that, I got a bridge for sale.

The SS system needs very much to be improved. And austerity is exactly the wrong thing to be doing now. How do we get the message across?

Everything on your list could be done with no change in lifestyle for the 1% or their children’s children and then being an American Citizen would be something to be proud of again. We are the richest country in the world and are going FORWARD to an aristocracy with a caste system like India or 1500′s Europe.

As for 1500s Europe, we’re already there. Now going toward India caste system.

The defined benefits pension plans are a nightmare for ordinary people. It took me three years (I started that long before my retirement) to select a manager for my substantial fund. I consider myself well-informed about fonancial matters as a professional economist, but I was totally at sea. Fortunately I had good contacts who steered me to reputable firms who don’t charge an arm and a leg, and I shy away from anyone promising 8 percent returns (it used to be 10 percent edging into Madoff territory), but most people simply don’t have the wherewithal to do the research and stand up to the sales pitch. These guys and gals are good at it.

Defined benefits is the best option. Right now the low interest rates on Treasuries are killing the plans, however.

Rubin ought to be forced to pay back the 120 million dollar bribe he got from Citigroup as a downpayment on the debt.

Yes, yes, yes. In a real world, with a real social democratic party in power, this is the discussion we would be having. Unfortunately, you will have to have this discussion with Atrios, because all the VSPs think you’re mad. Mad I tell you.

Ummm… I am more worried about ME!!!!!

Not to be selfish but I think current retirees will get along fine regardless. Many also have actual pensions that most younger people were never even offered.

I get a letter from SS every now and then which says if you retired today you would get XXX amount a month. Its a joke today. When you add 20, 30, 40 years of inflation it would cover nothing. Barely enough for food.

I feel my old age will consist of living in some run down section 8 apt and eating nothing but a few crackers a day.

This is why the Fix The Debt folks are so in earnest to do this fast while no one is checking the actual details:

This report shows that this ‘crisis’ is for the purposes of evading taxation.

h/t marym

So you’re an optimist then? You believe Section 8 will still be there for you? Look, it’s obvious that the private market is the answer. Invest in cat food futures now.

I don’t think eliminating the cap on payroll would be enough. I would suggest that we fix capital gains tax though and throw in a percentage of that to offset things. Let the Wall Street parasites fund us since we saved their hides.

Yeah. Also, Obama damn sure doesn’t want Elizabeth Warren on his left as he prepares to sell out the people who elected him.

BTW, could the Grand Sellout be the reason for the rumors about Pelosi’s stepping down. Wouldn’t Steny be much easier for Barry and his Boehner to work with. They could invite Mitch to play golf.

Scary how I had the same thoughts about Nancy P. and Steny H.. She kind of disappointed last Summer when she said that she more or less thought Bowles and Simpson was a good plan. Maybe they got to her or maybe she stopped fighting the good fight.

I’m 64 and I’m glad I’ll most likely be dead before I witness the Royal Screwing that’s in store for younger people. You can only push people so far until you get what the French aristocracy got in the 18th century. Going to be some dark time a-coming.

We should be hearing DIRE by Thanksgiving but not from Dodd and Frank this time, maybe Pelosi and Boxer? This Grand Bargain was already written on a cocktail napkin and agreed upon by all the important people some time ago.

Obama is starting his ‘toss supporters under the bus’ routine. Latest WH insider report has uber-warmonger Susan “War on Iran NOW” Rice being named next Secretary of State designate. John Kerry being shunted into Secretary of Defense slot. If Kerry has any character, he will tell Obama: Not just NO but Hell No!

Then, Obama will start his caving dance routine, capitulating to House Rebaggers on Medicaid, Medicare, SS, Food Stamps, etc.
So more “liberals” have been elected to the Senate? Existing ones melted at the first signs of pressure from WH in the last few years. Remember the publicly signed pledges by 63 Dems in the House Progressive Caucus to vote against any Health Care Reform bill that DID NOT contain a Public Option? I do. What happened? They folded faster than a cheap suit and melted away into the background. Right Rep. Grijalva?

Knut, this part is correct:

Defined benefits is the best option.

At the top of your comment you also use the term “defined benefits” but I think you meant the “defined contribution” plans are a “nightmare for ordinary people,” because they put all the investment risk on you.

Jon left out the word “benefits” when he said:

The move away from defined pension programs to 401(k)s is now starting to bear fruit in the form of a generation of older Americans who lack sufficient money for their old age.

The key is the traditional and union-bargained retirement plans define the “benefits” so you, the retiree, don’t need to screw around with the investment risk and the actuarial gains trying to figure out how to generate the monthly retirement income you need. The “defined benefit” plans define that amount for you. Which is the reason, of course, why employers and plutocrats hate them. Which is the big reason they hate Social Security.

We need to INCREASE Social Security benefits. Social Security is only five percent (5%) of GDP right now, according to Zach Goldfarb over at WaPo. The big hysteria is about the eventual rise from 5% to 6% of GDP. Seems to me, we would be a lot better off if we could jack up Social Security benefits to 8% or 10% of GDP.

yes to all.

yes.

According to Matt Bai, Pelosi and Reid, were reluctant participants in the July 2012 deal.

Entitlements which need to be cut, IMO:

Capital gains rates need to increase and be included and taxed as payroll tax or FICA.
Big Oil subsidies need to cease to exist.
Bloated defense spending and no-bid contracts.
Corporate tax rates should be doubled.
Corporate CEOs should not be allowed to have corporations deduct their salaries from corporation profits as a deduction.
Private universities, hospitals and private churches should have to pay property taxes to their communities and should not be permitted to become industrial strength landowners and landlords.
Lease holding energy companies should be taxed to fund superfund cleanup funds and to pay for health externalities related to dirty energy forms such as fossil fuels and nuclear power plants.
End big ag subsidies and substitute managed crop insurance instead.

correction: in the July, 2011 deal

SS has an annual inflation adjustment called COLA, so the monthly number you’re looking at, would go up by the amount of the cummulative COLA annual adjustments over time.

this is the part of SS that is being stealth-attacked, called the “chained CPI”. SS was actually designed pretty well to account for inflation. sure the CPI lags behind real inflation a bit, but it’s better than nothing, I guess.

They would be happy if all the boomers that will be retiring with an adequate income to just jump off the nearest cliff. To say that people should be responsible for investing is absurd. Tell that to someone working 2 minimum wage jobs, has a couple kids and then has to figure out what stock to buy?
My husband’s parents lived in Germany up until the late 90′s and were rewarded quite well with an adequate income which generated into older people spending the money on little trips, small gifts, etc.
To see this country do everything wrong just about makes me crazy. My ssi is not much since I was out of the workforce raising kids and I remember back in the 60′s saying home makers should be putting something into social security then since now, I have very little. I am in good health, exercise, read and am very lucky indeed. I fear for my kids and those coming after especially when we allow our government to do just about anything they want with no input from us

There is also a large downside to defined benefit plans. They assume that the company will still be in business, and will not go through “managed bankruptcy” which is Bain Capital’s specialty.

The defined benefit plans at United Airlines, all the steel making companies, and many others too numerous to mention were a false promise. Not to mention how many good companies with pensions will be “Bained” in the future. You’d probably have to get to the Fortune 100 companies to find pensions that will exist in your retirement years down the road. State and local government pensions are being Bained currently, and the Fed pension system is probably next.

So maybe the 401k route could work for many folks. Having set up one for my company, if you go directly to the largest brokers, Vanguard, Fidelity, Schwab you can eliminate about 90 percent of the fees. Most companies are swindled by their banks administering the programs, that’s a death wish.

Last component is investment education. Not hard to do, look for large low-fee firms like Pimco or Vanguard and make appropriate choices based on your age.

Hey Tom,
you just put the country into a massive SURPLUS and eliminated the national debt. Congrats !

She is loyal to her Party, which was taken over by the Democratic Leadership Council, and to the head of her Party, the President.

We have to stop looking at this Democrat and that. The entire Party went in a different direction. The old timers, like Pelosi and Kerry, even Kennedy, had to adjust.

Obama might not be president today if John Kerry had not highlighted him in the 2004 Democratic Convention.