April 18^th

Factcheck has some interesting comments about Rand Paul this morning; he now thinks better of some nasty remarks he made about Dick Cheney. Paul pointed out that Dick was monumentally opposed to invading Iraq when he was Bush 41’s advisor, then after a hiatus from government to head Schlumberger, he reversed course and advised Bush ’43 that invading Iraq and getting its oil fields was a really great idea. Paul tries to claim that the switcheroo on his anti-Cheney comments were made before he was a candidate…not that the remarks weren’t true you understand, just that they were made before he was a candidate for the Senate and therefore clearly not politic. And so it goes.

Here we switch to Governor Christie who has plans for Social Security (SS); he begins by raising the age for full benefits to 69 instead of 67, the age for full benefits now. He has also suggested a means test: full benefits will be reduced if income from non SS sources reaches 80 thousand dollars a year and the benefits are stopped if the non SS income is over 200 thousand dollars a year. The means test is a good idea.

This will surely help to extend SS solvency but why not increase the base level on which the tax is levied? For incomes up to 118.5 thousand dollars a year the SS tax is 6.2 percent of wages and this must be matched by the employer. If your income is 237 thousand dollars a year your SS tax rate then drops to 3.1 percent and continues to decrease the more your income increases. How delightful for highly paid folks! If we kept the same SS tax rate and increased the base to say 474 thousand dollars and included some of the other changes Christie suggests we might have SS solvency well into the future.

 However, raising the age at which SS can be obtained is not a particularly good idea. Granted, it will save on the amount disbursed but it will have another less welcome effect. The jobs that would be vacated by the retirees if they left at 67 will not then be available for another two years until these workers retire at 69. That doesn’t seem very smart when we need more employment. If anything we should be trying to reduce the age at which people can retire in order to create more jobs. Increasing the base on which the tax is based could do that.

An additional point: some many years ago my sons were talking about SS and complaining that there would be no benefit for them when they reached retirement age. I pointed out that they, in their late teens and very early twenties, were already benefiting from SS. They didn’t understand how that could be. Then I told them that because their grandparents had SS payments I had a reduced obligation to provide for them and that allowed me to pay for their college tuition and support their college education. The benefits of SS payments accrue not just to the retirees who receive them but to others as well. People should be more aware of that.