In the current job climate with unemployment hovering around 9% the real push with the electorate is jobs. What is interesting is that both sides really have not changed the overall thrust of their sloganeering, they have just changed the slogans to match the push for jobs. Republicans still want low taxes to increase the investment dollar, and Democrats want to make sure that the middle and lower classes have the money and resources necessary to consume enough to drive the economy. Both sides have finally agreed that the deficit is a problem.
One of the key issues with cutting the deficit is the Social Security. Speaker John Boehner (R-OH) and others have talked about raising the retirement age to 70, which would lower the amount of benefits paid out to everyone.
An Unforeseen and heretofore undiscussed consequence of raising the retirement age will be the increase in people working to an age closer to 70. The current average retirement age in the United States is 62. This dovetails neatly with when Social Security benefits kick in.
As the elderly face the reality of not having a paycheck coming in until they reach the age of 70 they will choose to stay in the labor pool. Much like how creating mandatory schooling and having child labor laws drove the number of applicants seeking a job down, so too does having a paycheck going out to older people. The increased number of people hanging onto their jobs for approximately 5-8 years will cause the number of openings for the advancement of those already in the labor force and the number of jobs for those just entering the labor force to go down. This will cause the unemployment rate to go up.
In the end it comes down to a conundrum of "should we raise government income to keep the system workable for the next 20 years?" versus "should we just brace for greater unemployment rates in at least the short term to keep the tax rates low?"
This will be a boon for Wal-Mart, as they'll have an increased pool of applicants from which to hire greeters!
ReplyDeleteI continue to hear all sorts of different perspectives on Social Security, that it runs at a surplus, that it is doomed as the world's largest Ponzi scheme, that it might be okay in 50 years if we do NOTHING, that it is bankrupting the country.
ReplyDeleteSeems like a lot of politician's basing their rhetoric off the ignorance of how the system works in the vast majority of the population. And they wonder why our education system sucks. A stupid population is easier to manipulate.