Krugman - A Gut Punch to the Middle

[Pirate Smile]

A Gut Punch to the Middle
By PAUL KRUGMAN

Published: May 2, 2005

By now, every journalist should know that you have to carefully check out any scheme coming from the White House. You can't just accept the administration's version of what it's doing. Remember, these are the people who named a big giveaway to logging interests "Healthy Forests."

Sure enough, a close look at President Bush's proposal for "progressive price indexing" of Social Security puts the lie to claims that it's a plan to increase benefits for the poor and cut them for the wealthy. In fact, it's a plan to slash middle-class benefits; the wealthy would barely feel a thing.

Under current law, low-wage workers receive Social Security benefits equal to 49 percent of their wages before retirement. Under the Bush scheme, that wouldn't change. So benefits for the poor would be maintained, not increased.

The administration and its apologists emphasize the fact that under the Bush plan, workers earning higher wages would face cuts, and they talk as if that makes it a plan that takes from the rich and gives to the poor. But the rich wouldn't feel any pain, because people with high incomes don't depend on Social Security benefits.

http://www.nytimes.com/2005/05/02/opinion/02krugman.html?hp

[Skink]

1. Let's look on the bright side....

Maybe China will call in the loans and Iran will simultaneously peg it's oil to the Euro. Then we can all go under together.:toast:

[Fovea]

7. That is my

insomnia theatre feature presentation.

[Alizaryn]

2. KRUGMAN is great.

I wish there were more like him.

[nightfire]

4. There are more like him - it''s just that there is a tacit quota

in the mainstream media for 'cranks' and critics, no matter how accomplished they are. It's a fluke or a miracle that Krugman got the Times spot as a dissenting platform, though the fact that he has hung onto it means that the wary editors realize his critical perspective resonates 'out there.'

[tom_paine]

3. kick

:kick:

[ibid]

5. total retirement income for the rich barely affected-but middleclass loses

"I asked Jason Furman of the Center on Budget and Policy Priorities to calculate the benefit cuts under the Bush scheme as a percentage of pre-retirement income. That's a way to see who would really bear the burden of the proposed cuts. It turns out that the middle class would face severe cuts, but the wealthy would not.

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.<snip>

It's an adage that programs for the poor always turn into poor programs. That is, once a program is defined as welfare, it becomes a target for budget cuts.<snip>

http://www.nytimes.com/2005/05/02/opinion/02krugman.html

[Pirate Smile]

6. kick