----- Original Message ----- From: "Nick Arnett" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[email protected]> Sent: Tuesday, February 15, 2005 12:01 PM Subject: Re: What Social Security (and Its "Reform") Say About America
> Erik Reuter wrote: > > > If so, why do we need to continue increasing the cost cost of future > > social security payments faster than cost of living increases? > > Who says we do? We haven't in the past. Social Security's COLAs are based on the CPI, which is > based on the slowest-growing parts of the economy. If anything, the COLAs need to be based on > something that tries to reflect the whole economy, rather than a politically convenient subset. That's only partially true, Nick. The increase in payments to people already getting SS is a COLA. The increase in the starting SS payment is based on the mean wage, not COLAs. The latest wage formula that I could find was: PIA = (90 percent of the first $612 of the AIME) + (32 percent of the AIME between $612 and $3,689) + (15 percent of the AIME over $3,689). where AIME is the averaged monthly income over the last 35 years (with older dates corrected for the increase in wages), and PIA is the monthly payment for an individual. If the individual has a non-qualifying spouse, they get 50% of that individual's payment. Using that formula, at the present time, a couple could now receive, based on one wage earner, about 38k/year (this might be a little high based on past maximum income). In '45, given nominal wage growth, the highest earning couples would get over 65k/year, in '05 dollars....more after inflation. If both worked for 35 years, they could get >90k/year. I've posted these numbers before, with only minor corrections, IIRC. So, I'm fairly confident the numbers are at least close. If anyone can point to an invalid assumption I've made, I'd appreciate it. I think we can slow the increase in SS payments down in a progressive manner while still decreasing the fraction of elderly in poverty or near poverty. My rough goal would be to get to infinate sustainability under the present tax rate by 2050 or so. > > The number of children living in poverty in this country is a crisis, to name one relevant *real* > crisis. Agreed. Addressing the fact that we have tilted our government programs away from children and towards the elderly to a point where they are out of balance would be a decent first step in this. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
