Monday
Lazy argument
Paul Krugman's column has generated a lot of discussion, and it certainly makes a worthwhile point. That point is that if Social Security were changed so that only the poor receive meaningful benefits from it, it would lose a great deal of the political support which it currently engenders. So even if an initial change kept benefits for the the least well-off the same and only decreased benefits to middle and upper-classes, this creates a very real slippery slope problem.
But all of this has been already said. I want to pick a nit with the column and ask what purpose certain numbers he's using are supposed to serve. In particular, I think they're lazy writing used to make an obviously true point sound more meaningful, and more normatively forceful, than it is.
He says: The average worker - average pay now is $37,000 - retiring in 2075 would face a cut equal to 10 percent of pre-retirement income. Workers earning 60 percent more than average, the equivalent of $58,000 today, would see benefit cuts equal to almost 13 percent of their income before retirement.
But above that level, the cuts would become less and less significant. Workers earning three times the average wage would face cuts equal to only 9 percent of their income before retirement. Someone earning the equivalent of $1 million today would see benefit cuts equal to only 1 percent of pre-retirement income.
This appears to me to be a long way of saying that people with lower incomes get more out of social security. But there's nothing else there: since rich people have more money, and Social Security benefits are capped at a certain level, of course their benefits are less relative to their total income. Also, I think this is a situation where absolute numbers are really more relevant than proportions (this is also true of the original Jason Furman piece which Krugman is taking the numbers from, the numbers get apparent normative force from being written as proportions which they would lack if seen in absolute terms). So I really don't understand what, for instance, Mark Kleiman, is doing in his post about the column. I really understand that Bush's proposal isn't particularly progressive, but I don't see the normative force at all in, "or the people who got the most out of the tax cuts which blew the Social Security surplus, the hit would be much smaller, down to 1% at the million-dollar-a-year level." If those people had their Social Security benefits cut to zero, it would still be a small hit relative to their absolute income. So what's going on here? I also think the use of these figures may be part of what Andrew Sullivan means when he calls the column "flailing," but if so he is missing the forest for the trees, since the important part is the slippery slope argument.
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But all of this has been already said. I want to pick a nit with the column and ask what purpose certain numbers he's using are supposed to serve. In particular, I think they're lazy writing used to make an obviously true point sound more meaningful, and more normatively forceful, than it is.
He says: The average worker - average pay now is $37,000 - retiring in 2075 would face a cut equal to 10 percent of pre-retirement income. Workers earning 60 percent more than average, the equivalent of $58,000 today, would see benefit cuts equal to almost 13 percent of their income before retirement.
But above that level, the cuts would become less and less significant. Workers earning three times the average wage would face cuts equal to only 9 percent of their income before retirement. Someone earning the equivalent of $1 million today would see benefit cuts equal to only 1 percent of pre-retirement income.
This appears to me to be a long way of saying that people with lower incomes get more out of social security. But there's nothing else there: since rich people have more money, and Social Security benefits are capped at a certain level, of course their benefits are less relative to their total income. Also, I think this is a situation where absolute numbers are really more relevant than proportions (this is also true of the original Jason Furman piece which Krugman is taking the numbers from, the numbers get apparent normative force from being written as proportions which they would lack if seen in absolute terms). So I really don't understand what, for instance, Mark Kleiman, is doing in his post about the column. I really understand that Bush's proposal isn't particularly progressive, but I don't see the normative force at all in, "or the people who got the most out of the tax cuts which blew the Social Security surplus, the hit would be much smaller, down to 1% at the million-dollar-a-year level." If those people had their Social Security benefits cut to zero, it would still be a small hit relative to their absolute income. So what's going on here? I also think the use of these figures may be part of what Andrew Sullivan means when he calls the column "flailing," but if so he is missing the forest for the trees, since the important part is the slippery slope argument.
