2013 June 10 Monday
Robert Schiller: Make Social Security Based On Real GDP

Yale economists Robert Schiller argues Social Security payouts should be tied to the nation's economic health.

One alternative that we should consider is a different kind of index switch, linking retirees’ benefits to gross domestic product per capita, in current dollars. This measure responds to inflation just as the C-CPI-U does, but, in contrast, it also responds to changes in the nation’s resources, as measured by real G.D.P. There could also be corrections for other factors, like the dependency ratio, which compares the number of “dependents” (retired people and children) to the number of working adults.

Tying old age retirement benefits to the nation's ability to pay can either be done sooner with formulas as Schiller suggests or will be done later in financial crises. My guess: it will be done later, with more abrupt and painful effects under enormous pressure. Lack of economic growth has caused political stalemate as politicians no longer can find the money needed to buy off and placate political factions.

Share |      By Randall Parker at 2013 June 10 10:23 PM 


Comments
James Bowery said at June 11, 2013 5:21 PM:

Its pretty clear to me from observing the portion of the nation of settlers that's here in Iowa that the game plan is to kill them off through institutional incompetence. This can be accomplished in all sorts of ways. A good example: Medicaid sends out forms that cannot possibly be filled out by someone who is disabled. If those forms are not properly filed, Medicaid benefits terminate within a month. This can kill -- particularly if someone comes to depend on those payments. All that has to be done is expand this kind of institutional incompetence and, bingo, budget problems disappear along the with the reminder that some people, other than the nation of immigrants, actually had to undergo a bit more inconvenience than arriving penniless at Ellis Island in order to provide the civilization those immigrants now claim as their "entitlement".


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