America's Largest Newspaper Launches a Nasty Attack on Grandma and Grandpa
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The conservative playbook isn't difficult to decipher. They rely heavily on the politics of resentment – point to someone in our society, claim they're a lucky-duck using unverifiable anecdotes or cherry-picked data, and then urge people to ask, "Why does that person have it so good when I'm busting my ass to make ends meet?"
It was apparent in Ronald Reagan's “welfare queen” rhetoric, and also in the ubiquitous references to “young bucks” buying T-bone steaks with their food-stamps. Now the Right's using the exact same play for those greedy public employees supposedly living large on their fat salaries.
This week, the Wall Street Journal featured an excellent example of the genre by John Cogan, a fellow at the corporate-backed Hoover Institution. The piece, titled, “ The Millionaire Retirees Next Door,” is a shining testament to the dishonesty surrounding our discourse on “entitlements.”
Cogan's pitch is this: “The typical husband and wife who reach age 66 and qualify for Social Security ... will begin collecting a combination of cash and health-care entitlement benefits that will total $1 million over their remaining expected lifetime.” They'll get an average of $1 million in cash and health-care bennies over the rest of their lives, which makes them millionaires! Why aren't you?
What's more, “The typical 66-year-old couple and their employers, on their behalf, have contributed nearly $500,000 in payroll taxes.” In other words, they're going to pull in a half-million more than they paid! “We cannot even remotely afford to make good on these promised benefits ...[to] so many million-dollar couples,” he writes. “The benefactors will be a generation of younger workers who are trying to support themselves and their families while paying taxes to finance the rest of government spending.” Won't somebody think of the children?
All of this, Cogan says, is according to his own calculations based on government data. It's all wrong, however, and while it's often difficult to say with any certainty whether someone is intentionally lying to people or simply making an honest error, in this case it's clear.
Cogan's sleight of hand is simple: when he gives the amount this average couple paid into the two programs, he adjusts for inflation to current dollars. On the benefits side, he doesn't – he uses future dollars, which results in a larger number. John Cogan is a professor of public policy at Stanford University; every one of his students knows that he or she would get an F comparing inflation adjusted numbers on one side of the ledger to nominal dollars on the other – it's apples and oranges and it's about as mendacious as one can get.
He tries a similar trick with this grievance:
In 1978, Congress instituted automatic cost-of-living adjustments for Social Security. That's reasonable. But Social Security's method of automatically increasing benefits to successive cohorts of retirees by more than inflation makes less sense. It means that the average worker who retires this year receives a monthly benefit that is about 23% higher after adjusting for inflation than the monthly benefit received by the average worker who retired 20 years ago. The average worker who retires 10 years from now is, in turn, promised an initial benefit at retirement that is 14% higher after adjusting for inflation than the average worker who retires today.
Congress passed an automatic cost-of-living increase in 1972, not 1978. COLA is based on the rate of inflation, so benefits aren't “automatically” increased faster than the rate of inflation. The reason retirees today will take home larger benefits than those who left the workforce 20 years ago reflects the higher wages they earned. The same is true of those who will retire 10 years from now.