Via digby, here's revolutionary, and spot-on, idea from economist James Galbraith: "ACTUALLY, THE RETIREMENT AGE IS TOO HIGH".
The most dangerous conventional wisdom in the world today is the idea that with an older population, people must work longer and retire with less.
This idea is being used to rationalize cuts in old-age benefits in numerous advanced countries -- most recently in France, and soon in the United States. The cuts are disguised as increases in the minimum retirement age or as increases in the age at which full pensions will be paid.
Such cuts have a perversely powerful logic: "We" are living longer. There are fewer workers to support each elderly person. Therefore "we" should work longer.
But in the first place, "we" are not living longer. Wealthier elderly are; the non-wealthy not so much. Raising the retirement age cuts benefits for those who can't wait to retire and who often won't live long. Meanwhile, richer people with soft jobs work on: For them, it's an easy call.
Second, many workers retire because they can't find jobs. They're unemployed -- or expect to become so. Extending the retirement age for them just means a longer job search, a futile waste of time and effort.
Third, we don't need the workers. Productivity gains and cheap imports mean that we can and do enjoy far more farm and factory goods than our forebears, with much less effort. Only a small fraction of today's workers make things. Our problem is finding worthwhile work for people to do, not finding workers to produce the goods we consume.
He goes on to argue that the Great Recession has left us with a jobs deficit of about 11 million--11 million workers looking for a job that just isn't there. "So common sense suggests we should make some decisions about who should have the first crack: older people, who have already worked three or four decades at hard jobs? Or younger people, many just out of school, with fresh skills and ambitions?"
As a rough cut, why not enact a three-year window during which the age for receiving full Social Security benefits would drop to 62 -- providing a voluntary, one-time, grab-it-now bonus for leaving work?
A huge percentage of the long-term unemployed are older workers, and we're seeing the highest unemployment rate for over-55s since 1948. Letting these people fall through the safety net, as many of them are, having exhausted all unemployment benefits, is far greater problem in the long-range for the nation than expanding Social Security to them.
How do you pay for it? There are actually some pretty straight-forward solutions, should Democrats have the will to push for them. End the payroll tax cut. Raise the payroll tax cap so that income over $106,000 is subject to payroll taxes. Here's a magic bullet: comprehensive immigration reform that brings millions of undocumented workers into the system, securing Social Security's future for decades to come.
But in the meantime, Galbraith has the right idea, though the chances of it's simple wisdom being recognized by the powers that be seem exactly nil. Digby:
In a modern, civilized world in which people were trying to find economic answers to the problem of how to deal in a humane way with an aging population in a time of economic transition, Galbraith's prescription would at least be part of the discussion. Unfortunately, we are not in a civilized world -- we are in some weird Randian/Calvinist era in which our leaders seem to have confused economics with moralism and have decided that the average folk have had it too good for too long.