Monday, February 28, 2005

Social Security and the economy

What a Rich Nation Should Really Be Doing About Social Security
Listening to the debate between the Administration and even its most adventurous critics one would imagine that only an extremely limited range of Social Security options are even conceivable. One would also imagine that we live in an extremely poor society which is ultimately going to have to find ways to squeeze its seniors financially or somehow we will all perish. The truth is radically different.

Gar Alperovitz summarizes a number of progressive proposals for Social Security, all of them worth consideration. President Bush would have you believe that there is a crisis, and that in the future retirees will not be able to receive as much money as they do today because of this crisis. This is patently false. However, he is right that Social Security should be reformed--not to save it from doom, but to make it even better. If we could reduce the disparity between rich and poor by taxing the rich--the inevitable winners as the economy grows--we would have money enough to make Social Security true security for all.

Until the 1980s, the upper tax rate was 70%. Now the rich would stage a coup if anyone dared raise it to 30%. All jobs should not pay equally, but the idea that anyone can live in good conscience knowing that they make so much more than some people with two full-time jobs do is astonishing.

One more fair proposal is setting a minimum living wage ($13 an hour, say) and a maximum wage of ten times that. The money lost by paying the lowest employees more would easily be made up by the money saved by paying the highest employees less. There is no reason why anyone could be legitimately dissatisfied with a salary of $250,000 a year.

Combined with a heavily progressive income tax, Social Security and all other social welfare programs could easily be accommodated. We could even finally get our hands on that socialized healthcare they have in more civilized nations.


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