Moody investors’ wise minds have finally recognized what other primary credit rating agencies have passed years: America has a problem with debt. Now America will now be recognized to solve the problem of this debt asking another difficult fact: Americans have a retirement problem – soon, they retire soon.
Despite reports that Moody’s decision is associated with the fiscal effect of $ 3.7 trillion tax tax currently debating the house, which bill is just the proverbial chairs of the titanic deck. The largest source of long-term debt problem in America, which is not included in the 10-year budget understandings, unstoppable entitlements, most social security and Medicare security.
For some reason it is considered political wise for two Republicans and Democrats to promise that they “cannot touch” Social Security. It’s not realistic. Over the next 10 years, the program cannot pay full benefits. There is something to change, and that something is the age of retirement. Americans want to enjoy French for their early retirement, but many Americans are also retiring before 60s. In many states, retirement of 62 is behavior.
Since Social Security reform in the 1980s, the “normal retirement age” – which is, the age of which people qualify for the benefits – ranging from 67, depending on when they were born. Have additional financial incentives to delay retirement until the age of 70
But most Americans don’t take advantage of late retirement. The early retirement of Social Security, 62, remained unchanged, and no concrete plans to increase it.
Over a third of Americans, and nearly 40% of women, retiring early.
This is not a perfect choice. The age discrimination is true; Someone who has lost their job after age 60 will find it very much to get another. Some people also have physical requested jobs they cannot do in their 60s.
However, organizing the retirement system around a minority of the population is unreasonable. Just because some people don’t work at the age of 62 don’t mean that age retirement option should be available at all. Those who need to retire early will be better served by the Social Security Security Program. For all, the first retirement age should be gradually increased by 65 over the next decade. There is so much to do older workers who are more attractive to employers, especially with health benefits, because most older workers qualify for Medicare.
Of course, raising the first retirement is not by itself close the entire Gap to group Social Security. If it is increased and then indexed in the expectation of life (and the usual retirement age), and depending on the details, then the longest disability can be reduced to anywhere between 14% and 50%.
The increase in early retirement can also be converted, because the more likely to live longer, while early retirement is more common in the states of low income. So the rise of the first retirement age should be paired with a 2.5% payroll tax increase at about $ 250,000. That would be more realistic, fair and actually responsible than the higher taxes of the rich, or just picking up a bigger disability.
Honestly reject the moody down as not news. Debt problem is not new, and rating agencies have lost many credibility in recent decades. But this is an opportunity for a faithful politician to level Americans. The country’s debt problem is larger than the latest budget or tax bill; It begins and ends with entitlements. And solving that problem only requires Americans not only pay more taxes, but also in retirement later in life.
Allison Schrager is a Bloomberg opinion columnist consisting of the economy. A senior partner in the Manhattan Institute, he is the author of “an economist walking into a brothel: and other unexpected places to understand the risk.” / Tribune News Service
