----- Original Message ----- From: "Nick Arnett" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <brin-l@mccmedia.com> Sent: Thursday, February 17, 2005 7:07 PM Subject: Re: What Social Security (and Its "Reform") Say About America
> Dan Minette wrote: > > > I think he got that from: > > > > <quote> > > > >>If so, why do we need to continue increasing the cost cost of future > >>social security payments faster than cost of living increases? > > > > > > Who says we do? We haven't in the past. > > Perhaps I don't know what Erik meant in that sentence above. Here's how I read it: Why is it > imperative that going forward, Social Security benefits must rise more quickly than the cost of > living. E.g., if the cost of living goes up 10 percent, then Social Security benefits must go up > more than 10 percent. If that's not it, I'd appreciate clarification. > > If that is the meaning, then I still don't know where it's coming from. Who is saying this? He states that the present plan raises SS faster than the cost of living. That is a fact as long as mean (not median) wages rise faster than the cost of living. Historically, they have risen at a rate of about 1.5% to 2.0% above inflation. A reasonable, conservative assumption is that they will rise at a rate of about 1.5% above inflation in the future. It's not exactly that SS must go up faster than the cost of living. It's that SS payments are tied to an index that has gone up faster than the cost of living for 70 years, and that virtually every ecconomist expects to continue to go up faster than the cost of living. (This may not be true for short time intervals during recessions...but has long been true over longer time periods. Maybe wages fell faster than the cost of living during the first years of the Great Depression, but I think that's the last candidate for a prolonged period of time when that was true. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
