Medical Tuesday Blog
A Missed Opportunity to reign in Social Security
Dr. Rosen: Social Security and Medicare are projected to become insolvent during the next decade. What are the possible solutions?
Dr. Edwards: It is fairly obvious that both will need to be cut. But will that be possible?
Dr. Milton: It will be difficult if even possible.
Dr. Ruth: The country has gotten so used to entitlements, that they get extremely anxious if the subject of reducing them or discontinuing them is even brought up.
Dr. Michelle: Isn’t social security beginning to pale in comparison to retirement needs?
Dr. Edwards: I certainly did not plan to retire at age 65. I didn’t feel old at that time. What would I do without a medical practice? I was planning to wait until age 72 when social security would max out.
Dr. Milton: I felt the same. For every dollar you made after age 65, you would lose a portion of your SS until age 72. Then Clinton eliminated the decrease in benefits after age 65. And so we’re getting full SS benefits from age 65 to age 72 and beyond. That was a benefit that none of us needed or expected.
Dr. Rosen: That was an unfortunate mistake. I think nearly all professional people would plan to work into the 70s. SS was started at age 65 when half the population had died by age 65. So it only had to pay benefits to about half the people that were still alive. But now when we live into the 80s and 90s, SS taxes can’t provide benefits to the entire population for an extra 10-15 years. That’s the obvious reason that SS is becoming insolvent. Benefits should have been indexed to life expectancy at that time.
Dr. Ruth: That’s a very good point. If those benefits had not increased from age 65 to age 72, it could have been a relatively pain free transition to begin indexing to life expectancy.
Dr. Edwards: That would be pain free for us professional folks. But the laboring union work force look constantly toward their retirement age. I see some of them constantly counting their years, then monthsk and then the days until they retire. They think that retirement is heaven on earth.
Dr. Milton: Let’s be careful not to characterize all workers, even skilled workers as union people. Unions have gotten smaller over the last fifty or so years as membership dwindled.
Dr. Ruth: But let us not blame unions. There are some professional people that are unionized. I can think of our nursing colleagues as their professional organizations gradually became full-fledged unions. Isn’t the California Nurses Association now considered a union? And how about the American Nurses Assn?
Dr. Yancy: When I worked for the state, I had to be a member of the physicians union, the UAPD. As far as I was concerned, this was a tax with no benefits.
Dr. Sam: Likewise, when I worked for the Federal Government, I had to pay physician union dues. I think the government wanted a union across the table that they could spar with. I’m not aware of any benefits they obtained.
Dr. Edwards: I agree with Dr. Rosen we missed a golden opportunity when President Clinton lowered the maximum SS benefits to age 65 from age 72. I think the age for partial benefits could have been increased from age 62 to age 65 to appease the laborer, and the full retirement benefits delayed to age 72. This would have kept SS solvent for a long time.
Dr. Rosen: If we then would have simultaneously indexed both early benefits at age 65 and full benefits at age 72 to longevity, SS could possibly have had continuing benefits in perpetuity.
Dr. Milton: That should not have been an abrupt change since we now have so many other retirement options.
Dr. Rosen: Just look what the CEO of Home Depot accomplished? He hired High School grads, and with his Pension and Stock distribution plan, all of his initial employees are now millionaires before they retired and before any SS benefits.
Dr. Ruth: If there were not any social security, don’t you think most Americans could have done the same?
Dr. Edwards: Yes, I do. I think SS made us slaves to the government. It made us greedy, always asking for more, and more, and more benefits.
Dr. Milton: When you think you are entitled, you will always feel you should be entitled to more.
Dr. Ruth: But isn’t that just human nature? To prevent that we have to stop this before any entitlement occurs in the future. We can’t redo the past, unfortunately.
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