Dean Baker at the Center for Economic and Policy Research offers a smackdown of Abby Huntsman’s warnings to millenials on MSNBC.
For today I want to highlite several points. Dean Baker offers essentially Dale’s Northwest Plan as a way to deal with any problems of funding.
Center for Economic Policy and Research
lifted from an e-mail by Bruce Webb:
This represents current SS projections of wages before and Dean’s calculations after the imposition of a 0.5% each employee/employer annual boost in FICA each year from 2020 to 2050. In other words close enough to Northwest as makes no difference. And in the body of the piece Dean points out that this is enough to fully fund SS scheduled benefits through and past the 75 year window.
There are, of course, other aspects to the post that are important to the narrative. But how does Abby get airtime? She is a lot prettier than Dale Coberly? (I know, snark, but it is still true). From the CEPR post comes two facts I think need highlighted today:
The other part of Huntsman story that is even more misleading is the idea that the finances of the program poses some insoluble problem or that the program will impose an unbearable burden on millenials. In fact, average wages are projected to grow substantially in coming decades. If most millenials get their share of wage growth, then they will enjoy far higher standards of living than do workers today, even if their taxes are increased to cover the cost of a larger number of retirees.
Dan here…She really shouldn’t use talking points so easily dealt with. But the key point about millennials is that if their wages do not reflect increases in the economy and productivity gains, Baker summarizes:
In the last three decades most workers have not shared in the growth of the economy. Most of the gains have gone to profits or highly paid workers like Wall Street traders, CEOs, and some celebrity types like Ms. Huntsman. If this pattern continues then millenials may not see rising living standards in the decades ahead. However, the risk to living standards posed by the continuing upward redistribution swamps any risks posed by a larger population of retirees. It is understandable that those who benefit from the upward redististribution would prefer to have public attention focused on Social Security, but this focus is not based in economic reality.