about

COVID-19's Painful Lesson About Strategy and Power

Joseph Nye writes that while trade wars have set back economic globalization,  the environmental globalization represented by pandemics and climate change is unstoppable. Borders are becoming more porous to everything from drugs to infectious diseases to cyber terrorism, and the United States must use its soft power of attraction to develop networks and institutions that address these new threats.




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What Economics Can Say about an Effective Response to the Coronavirus

In a recent podcast interview, Robert Stavins and Scott Barrett discussed lessons from historic pandemics, how economists can help with policymaking surrounding the coronavirus, and what the “post-pandemic economic equilibrium” might look like. Resources Magazine has published an abridged version of their conversation.




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What I Wish I Had Said on CNN About Trump's 'Lysol and Sunshine' Speech

Joel Clement appeared on CNN's Erin Burnett OutFront on April 23, 2020.  In this blog post for the Union of Concerned Scientists, he elaborates on what he wishes he had said during that interview.




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Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

What I Wish I Had Said on CNN About Trump's 'Lysol and Sunshine' Speech

Joel Clement appeared on CNN's Erin Burnett OutFront on April 23, 2020.  In this blog post for the Union of Concerned Scientists, he elaborates on what he wishes he had said during that interview.




about

Trump Turned the Death Count Into a Story About Himself

Official figures exclude thousands who have died during the pandemic. To draw the right lessons, the United States needs an accurate tally of the victims.




about

Accumulating Evidence Using Crowdsourcing and Machine Learning: A Living Bibliography about Existential Risk and Global Catastrophic Risk

The study of existential risk — the risk of human extinction or the collapse of human civilization — has only recently emerged as an integrated field of research, and yet an overwhelming volume of relevant research has already been published. To provide an evidence base for policy and risk analysis, this research should be systematically reviewed. In a systematic review, one of many time-consuming tasks is to read the titles and abstracts of research publications, to see if they meet the inclusion criteria. The authors show how this task can be shared between multiple people (using crowdsourcing) and partially automated (using machine learning), as methods of handling an overwhelming volume of research.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

COVID-19's Painful Lesson About Strategy and Power

Joseph Nye writes that while trade wars have set back economic globalization,  the environmental globalization represented by pandemics and climate change is unstoppable. Borders are becoming more porous to everything from drugs to infectious diseases to cyber terrorism, and the United States must use its soft power of attraction to develop networks and institutions that address these new threats.




about

What Economics Can Say about an Effective Response to the Coronavirus

In a recent podcast interview, Robert Stavins and Scott Barrett discussed lessons from historic pandemics, how economists can help with policymaking surrounding the coronavirus, and what the “post-pandemic economic equilibrium” might look like. Resources Magazine has published an abridged version of their conversation.




about

What I Wish I Had Said on CNN About Trump's 'Lysol and Sunshine' Speech

Joel Clement appeared on CNN's Erin Burnett OutFront on April 23, 2020.  In this blog post for the Union of Concerned Scientists, he elaborates on what he wishes he had said during that interview.




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F1 paddock worried about leaving Shanghai

As the European air chaos continues due to the Icelandic volcano cloud, Lotus has booked its entire race team on flights to Malaysia




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'Stop moaning about Hamilton' - Ecclestone

Bernie Ecclestone has told Lewis Hamilton's rivals to "stop moaning" about the on-track tactics of the 2008 world champion




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China confident about extending GP contract

The Chinese Grand Prix appears to be edging closer to an extension of its contract with Bernie Ecclestone




about

Grow Up About Dictators, America!

The U.S. Democratic primary has exposed an obsession with morality when it comes to foreign policy that is harmful to strategic and moral objectives alike, Stephen M. Walt writes.




about

Accumulating Evidence Using Crowdsourcing and Machine Learning: A Living Bibliography about Existential Risk and Global Catastrophic Risk

The study of existential risk — the risk of human extinction or the collapse of human civilization — has only recently emerged as an integrated field of research, and yet an overwhelming volume of relevant research has already been published. To provide an evidence base for policy and risk analysis, this research should be systematically reviewed. In a systematic review, one of many time-consuming tasks is to read the titles and abstracts of research publications, to see if they meet the inclusion criteria. The authors show how this task can be shared between multiple people (using crowdsourcing) and partially automated (using machine learning), as methods of handling an overwhelming volume of research.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

What growing up with a sports-obsessed mother taught me about life and learning

Blog
While Amma is passionate about sports, Appa just cannot understand what the hype is all about. But she has allies in my sister and me.
Amma looking at the Football World Cup schedule pasted on the door.
It was June 9, 1990. Cameroon had done the unthinkable. They had defeated World Cup champions Argentina, led by the great Diego Maradona. Two images remain engraved in my memory forever. One that was playing on the television - Claudio Caniggia brought down by Benjamin Massing, which also meant the end of my footballing hero Maradona’s career. Another was playing at home the tension between Amma and Appa. Appa believed that sports were another form of entertainment (now that I think of it he was so right!!). He ardently believed that it makes us unproductive. He simply could not understand the 'adrenaline rush' that is associated with sports. And, on the other hand, Amma loved sports and learned to appreciate games like cricket, football and tennis by observing and listening to the commentary. She loved Sunil Gavaskar, Maradona and Martina Navratilova. Appa, whose sleep was broken by the commotion, was surprised to see his son crying, but was aghast to see his otherwise stoic wife heartbroken for an alien sport and for a faraway country, Argentina. I will never forget his reaction all my life. Amma, Meenakshi, born in Coimbatore, was born in a middle-class Tamil family. She was a promising student; however, economic conditions and the general apathy towards girl children’s education means she did not study beyond Class 10. But that did not stop her from learning. Binaca Geetmala and Ameen Sayani were her windows to Bollywood. After her marriage, radio commentary became her medium to fall in love with cricket. The Football World Cup and Wimbledon television telecast helped her fall in love with more 'alien' sports like tennis and football. The fact that her husband was not attracted to sports meant that she learned about the game by meticulously watching the proceedings and listening to the commentary closely. She would follow it up by reading about it in the newspaper or a sports magazine. She often tells me how she struggled to understand the idea of a deuce and advantage in tennis as she was not aware of the existence of a word ‘deuce’. It took her a great bit of persistent observation to decipher this unique format in tennis to break a tie.   Amma at the Centre Court in Wimbledon. At times her battle was lonely as not many in the family had similar likings as her. It was not until my sister and I grew up that she found someone to share her passion for sports with. It is with extreme doggedness that she seeks to learn new things. Years later we went to see Wimbledon; we saw a game at the Centre Court. She was as excited as a child when we got tickets for the London Olympics. I had promised her a trip to Europe and asked her to select the places of her choice. She chose Switzerland (her love for Bollywood, I guess), Paris and then she asked me if we could watch a football match at Camp Nou. She wanted to see her favourite Lionel Messi play. Amma and the author at the London Olympics. This year, I am home in Coimbatore for the Football World Cup. Amma has meticulously updated her knowledge about the teams (Panama and Iceland playing their first World Cup) and had stuck the schedule of the tournament on the door.   I ask her who should win. Amma says, "I want Messi to win, a player of his calibre needs a cup to sign off. A bit like Tendulkar needed a cup before he retired." How could I argue with her? Nothing has changed - her spirit, her keenness to learn and her strong opinion. I remember she always made coffee for me during the late-night games. I told her to take a nap for I can wake her up and make coffee for her; after all, I can do this bit for the lady who taught me to observe, learn, and keep learning. She is still a child, and I am holding on to the one in me. SS Venkateswaran returned to India after an 8-year stint in the UK. Before moving to Bengaluru, he will watch the Football World Cup 2018 with his Amma in Coimbatore.




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COVID-19's Painful Lesson About Strategy and Power

Joseph Nye writes that while trade wars have set back economic globalization,  the environmental globalization represented by pandemics and climate change is unstoppable. Borders are becoming more porous to everything from drugs to infectious diseases to cyber terrorism, and the United States must use its soft power of attraction to develop networks and institutions that address these new threats.




about

What Economics Can Say about an Effective Response to the Coronavirus

In a recent podcast interview, Robert Stavins and Scott Barrett discussed lessons from historic pandemics, how economists can help with policymaking surrounding the coronavirus, and what the “post-pandemic economic equilibrium” might look like. Resources Magazine has published an abridged version of their conversation.




about

What I Wish I Had Said on CNN About Trump's 'Lysol and Sunshine' Speech

Joel Clement appeared on CNN's Erin Burnett OutFront on April 23, 2020.  In this blog post for the Union of Concerned Scientists, he elaborates on what he wishes he had said during that interview.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

What I Wish I Had Said on CNN About Trump's 'Lysol and Sunshine' Speech

Joel Clement appeared on CNN's Erin Burnett OutFront on April 23, 2020.  In this blog post for the Union of Concerned Scientists, he elaborates on what he wishes he had said during that interview.




about

Trump Turned the Death Count Into a Story About Himself

Official figures exclude thousands who have died during the pandemic. To draw the right lessons, the United States needs an accurate tally of the victims.




about

Grow Up About Dictators, America!

The U.S. Democratic primary has exposed an obsession with morality when it comes to foreign policy that is harmful to strategic and moral objectives alike, Stephen M. Walt writes.




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Webber unhappy about using lower-spec wing

Mark Webber was clearly unhappy after qualifying for the British Grand Prix, as he was forced to run with a lower-spec front wing than his team-mate Sebastian Vettel on pole




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Accumulating Evidence Using Crowdsourcing and Machine Learning: A Living Bibliography about Existential Risk and Global Catastrophic Risk

The study of existential risk — the risk of human extinction or the collapse of human civilization — has only recently emerged as an integrated field of research, and yet an overwhelming volume of relevant research has already been published. To provide an evidence base for policy and risk analysis, this research should be systematically reviewed. In a systematic review, one of many time-consuming tasks is to read the titles and abstracts of research publications, to see if they meet the inclusion criteria. The authors show how this task can be shared between multiple people (using crowdsourcing) and partially automated (using machine learning), as methods of handling an overwhelming volume of research.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

Accumulating Evidence Using Crowdsourcing and Machine Learning: A Living Bibliography about Existential Risk and Global Catastrophic Risk

The study of existential risk — the risk of human extinction or the collapse of human civilization — has only recently emerged as an integrated field of research, and yet an overwhelming volume of relevant research has already been published. To provide an evidence base for policy and risk analysis, this research should be systematically reviewed. In a systematic review, one of many time-consuming tasks is to read the titles and abstracts of research publications, to see if they meet the inclusion criteria. The authors show how this task can be shared between multiple people (using crowdsourcing) and partially automated (using machine learning), as methods of handling an overwhelming volume of research.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

What I Wish I Had Said on CNN About Trump's 'Lysol and Sunshine' Speech

Joel Clement appeared on CNN's Erin Burnett OutFront on April 23, 2020.  In this blog post for the Union of Concerned Scientists, he elaborates on what he wishes he had said during that interview.




about

Trump Turned the Death Count Into a Story About Himself

Official figures exclude thousands who have died during the pandemic. To draw the right lessons, the United States needs an accurate tally of the victims.




about

COVID-19's Painful Lesson About Strategy and Power

Joseph Nye writes that while trade wars have set back economic globalization,  the environmental globalization represented by pandemics and climate change is unstoppable. Borders are becoming more porous to everything from drugs to infectious diseases to cyber terrorism, and the United States must use its soft power of attraction to develop networks and institutions that address these new threats.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

Grow Up About Dictators, America!

The U.S. Democratic primary has exposed an obsession with morality when it comes to foreign policy that is harmful to strategic and moral objectives alike, Stephen M. Walt writes.




about

COVID-19's Painful Lesson About Strategy and Power

Joseph Nye writes that while trade wars have set back economic globalization,  the environmental globalization represented by pandemics and climate change is unstoppable. Borders are becoming more porous to everything from drugs to infectious diseases to cyber terrorism, and the United States must use its soft power of attraction to develop networks and institutions that address these new threats.




about

What Economics Can Say about an Effective Response to the Coronavirus

In a recent podcast interview, Robert Stavins and Scott Barrett discussed lessons from historic pandemics, how economists can help with policymaking surrounding the coronavirus, and what the “post-pandemic economic equilibrium” might look like. Resources Magazine has published an abridged version of their conversation.




about

What I Wish I Had Said on CNN About Trump's 'Lysol and Sunshine' Speech

Joel Clement appeared on CNN's Erin Burnett OutFront on April 23, 2020.  In this blog post for the Union of Concerned Scientists, he elaborates on what he wishes he had said during that interview.




about

Accumulating Evidence Using Crowdsourcing and Machine Learning: A Living Bibliography about Existential Risk and Global Catastrophic Risk

The study of existential risk — the risk of human extinction or the collapse of human civilization — has only recently emerged as an integrated field of research, and yet an overwhelming volume of relevant research has already been published. To provide an evidence base for policy and risk analysis, this research should be systematically reviewed. In a systematic review, one of many time-consuming tasks is to read the titles and abstracts of research publications, to see if they meet the inclusion criteria. The authors show how this task can be shared between multiple people (using crowdsourcing) and partially automated (using machine learning), as methods of handling an overwhelming volume of research.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




about

COVID-19's Painful Lesson About Strategy and Power

Joseph Nye writes that while trade wars have set back economic globalization,  the environmental globalization represented by pandemics and climate change is unstoppable. Borders are becoming more porous to everything from drugs to infectious diseases to cyber terrorism, and the United States must use its soft power of attraction to develop networks and institutions that address these new threats.




about

Poll: What the American Public Likes and Hates about Trump's Nuclear Policies

The authors conducted a study which highlights how the U.S. public as a whole and various demographic groups view President Donald Trump's positions on nuclear weapons.




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Missed Connections: Talking With Europe About Data, Privacy, and Surveillance


The United States exports digital goods worth hundreds of billions of dollars across the Atlantic each year.  And both Silicon Valley and Hollywood do big business with Europe every year.  Differences in approaches to privacy have always made this relationship unsteady but the Snowden disclosures greatly complicated the prospects of a Transatlantic Trade and Investment Partnership.  In this paper Cameron Kerry examines that politics of transatlantic trade and the critical role that U.S. privacy policy plays in these conversations.

Kerry relies on his experience as the U.S.’s chief international negotiator for privacy and data regulation to provide an overview of key proposals related to privacy and data in Europe.  He addresses the possible development of a European Internet and the current regulatory regime known as Safe Harbor. Kerry argues that America and Europe have different approaches to protecting privacy both which have strengths and weaknesses.

To promote transatlantic trade the United states should:

  • Not be defensive about its protection of privacy
  • Provide clear information to the worldwide community about American law enforcement surveillance
  • Strengthen its own privacy protection
  • Focus on the importance of trade to the American and European economies

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Image Source: © Francois Lenoir / Reuters
      
 
 




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What do we know about poverty in North Korea?

       




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10 facts about Social Security and retirement saving


“Social security is not going broke,” said Carolyn Colvin, acting commissioner of the Social Security Administration, at a Brookings Retirement Security Project event this week. She was joined by Consumer Financial Protection Bureau Director Richard Cordray to discuss retirement planning and to unveil a new retirement calculator. “Social Security is the only guaranteed monthly income for a majority of older consumers,” Cordray said.

After their keynote addresses, a panel of retirement security experts moderated by Guest Scholar Joshua Gotbaum discussed efforts to improve retirement planning and what knowledge the average American needs to make retirement planning achievable. Ted Gayer, VP and director of Economic Studies at Brookings, introduced the event.

Here are 10 facts about Social Security and retirement planning mentioned during the event. Full video is available below and on the event’s page.

1/3 of U.S. households spend all of their available resources in every pay period

60 million people received Social Security benefits in September 2015

For the average worker, Social Security replaces only about 40 percent of pre-retirement earnings

45 million people are already 65 or order, and 10,000 people are turning 65 each day

The average American now spends about 20 years in retirement
(in 1950, the average was about 4 years)

4 in 10 Americans aged 51-59 are reaching retirement with limited or no savings,
and are projected to face a saving shortfall

~2/3 of the 40 million Americans 65 and older who receive Social Security benefits
depend on those benefits for ½ or more of their retirement income

It’s about 70 percent or more of income for those 80 or older

Only 60 percent of people who retire claim to have done any retirement planning at all

Delaying claiming Social Security “buys” people 6-8 percent more real benefits per year once they do take it

Olivia Mitchell, a professor at the Wharton School, University of Pennsylvania, explained this last point, noting that if a person stopped working at 62 but waited to claim benefits until 70, he or she would receive a benefit 76 percent higher in (real) dollars per month for life. “When to claim Social Security is many older Americans’ most important financial decision they will ever make in their lifetimes,” according to Mitchell.

Learn more about the event here and watch the video:

Helping America plan for retirement: Keynote remarks

Video

Authors

  • Fred Dews
     
 
 




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Retirement planning isn’t really about how you invest


Open any magazine aimed at the upper middle class and you’ll find lots of ads about retirement planning: financial firms fighting over which one will ‘advise’ you and get you to invest your money with them.

But, for most people, that isn’t the most important part of retirement planning. In fact, most people don’t have significant retirement savings, so arguing about who or how to invest them is irrelevant. Their “financial planning” is more likely to be about whether and when to pay the credit card bill.

So what kind of retirement planning really matters? There are lots of answers, but here are two of the most important: How long you work and when you apply for Social Security. For most people, these matter far more than whether your savings are invested in stocks or bonds.

Working Longer Requires More than Wishful Thinking. One of the great blessings of modern medicine is that people are living longer. But one of the consequences of that blessing is that unless people work longer and/or save more while they’re working, they’re more likely to run out of money in retirement than ever before. (The decline of traditional pensions, which paid lifetime income benefits, hasn’t helped either.) Most folks know this and are responding. According to a recent survey, 65 percent of baby boomers expect to work past 65.

But those expectations may not be met. Currently, about half of workers stop working before age 65: some are wealthy enough; more often they’re just not healthy enough.

Flexible retirement is more slogan than fact. Moreover, the job market isn’t as flexible as some may hope. Yes, an increasing percentage of seniors are working at least occasionally (~35 percent of men over 60, ~25 percent of women), but that doesn’t mean they’re doing their dream job on their chosen schedule. Increasingly, most of those who do work past 65 work full-time. Twenty years ago about 60 percent of workers over the age of 65 worked part-time; today about 60 percent work full-time.

It’s not clear why part-time work has declined, but one reason may be that employers still haven’t adjusted to the idea. A recent Transamerica Survey found that 66 percent of age 55+ US workers expect they will enter retirement flexibly -- but only 25 percent report that their employer offers the opportunity to move from full-time to part-time. However, the best way for employers to change is for their employees to ask (or have a union that does).

Retirement planning involves more than wishful thinking. If you want a flexible or a phased retirement, you need to know what your options really are – and the time to find out is long before you’re on the verge of retirement.

Defer Applying for Social Security? The other step that matters for most people is when they choose to apply for Social Security. Many apply as soon as they legally can do so, generally at age 62. For most people, that’s a mistake, because it means they will get reduced payments for the rest of their lives. Most others claim their Social Security benefits by the time they reach the “normal retirement age”, which for baby boomers is 66 years. (The normal retirement age is gradually being raised; for those born after 1959 it’s age 67.) For many people, that’s a mistake, too, because your lifetime benefit increases each year that you delay from 62 up to age 70.

How much more will your Social Security be if you start taking it at 70 instead of claiming benefits at the earliest possible age? A lot. For baby boomers, waiting till 70 increases the annual benefit by about 8% or each year of delay. That means instead of taking an annual payment at 62 of $10,000 a year, waiting 8 years means your annual payment will rise to $17,600 – inflation indexed for life. (If you keep working after age 62, then the math can be even more compelling, because Social Security is based on your highest 35 years of earnings.) If you are married, delaying also increases payments to your spouse after you die.

Of course, lots of folks have justifications for taking the lower payment at 62. Some say, “I won’t live long enough to make up the difference” – but in fact most people do live that long and many live longer. Others say, “I need the money to pay my bills.” But if you have savings or home equity, it’s worth using those first and taking Social Security later.

So the next time someone approaches you about moving your 401k money over to them, consider the option they won’t tell you about: spending it first and deferring Social Security. After all, Social Security gives you a guaranteed 8% return for waiting – and an 8% guaranteed return is hard to beat. (But they probably won’t tell you that, either.)


Editor's note: This piece originally appeared in Inside Sources.

Authors

Publication: Inside Sources
      
 
 




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What Trump and the rest get wrong about Social Security


Ahead of Tuesday’s primary elections in Ohio, Florida and other states, the 2016 presidential candidates have been talking about the future of Social Security and its funding shortfalls.

Over the next two decades, the money flowing into Social Security will be too little to pay for all promised benefits. The reserve fund will be exhausted soon after 2030, and the only money available to pay for benefits will be from taxes earmarked for the program. Unless Congress and the President change the law before the reserve is depleted, monthly benefits will have to be cut about 21%.

Needless to say, office holders, who must face voters, are unlikely to allow such a cut. Before the Trust Fund is depleted, lawmakers will agree to some combination of revenue increase and future benefit reduction, eliminating the need for a sudden 21% pension cut. The question is: what combination of revenue increases and benefit cuts does each candidate favor?

The candidate offering the most straightforward but least credible answer is Donald Trump. During the GOP presidential debate last week, he pledged to do everything within his power to leave Social Security “the way it is.” He says he can do this by making the nation rich again, by eliminating budget deficits, and by ridding government programs of waste, fraud, and abuse. In other words, he proposed to do nothing specifically to improve Social Security’s finances. Should Trump’s deal-making fail to make us rich again, he offered no back-up plan for funding benefits after 2034.

The other three GOP candidates proposed to repair Social Security by cutting future pensions. No one in the debate, except U.S. Sen. Marco Rubio from Florida, mentioned a specific way to accomplish this. Rubio’s plan is to raise the age for full retirement benefits. For many years, the full retirement age was 65. In a reform passed in 1983, the retirement age was gradually raised to 66 for people nearing retirement today and to 67 for people born after 1960. Rubio proposes to raise the retirement age to 68 for people who are now in their mid-40s and to 70 for workers who are his children’s age (all currently under 18 years old).

In his campaign literature, Rubio also proposes slowing the future rate of increase in monthly pensions for high-income seniors. However, by increasing the full retirement age, Rubio’s plan will cut monthly pensions for any worker who claims benefits at 62 years old. This is the earliest age at which workers can claim a reduced pension. Also, it is by far the most common age at which low-income seniors claim benefits. Recent research suggests that low-income workers have not shared the gains in life expectancy enjoyed by middle- and especially high-income workers, so Rubio’s proposed cut could seriously harm many low-income workers.

Though he didn’t advertise it in the debate, Sen. Ted Cruz favors raising the normal retirement age and trimming the annual cost-of-living adjustment in Social Security. In the long run, the latter reform will disproportionately cut the monthly pensions of the longest-living seniors. Many people, including me, think this is a questionable plan, because the oldest retirees are also the most likely to have used up their non-Social-Security savings. Finally, Cruz favors allowing workers to fund personal-account pensions with part of their Social Security contributions. Although the details of his plan are murky, if it is designed like earlier GOP privatization plans, it will have the effect of depriving Social Security of needed future revenues, making the funding gap even bigger than it is today.

The most revolutionary part of Cruz’s plan is his proposal to eliminate the payroll tax. For many decades, this has been the main source of Social Security revenue. Presumably, Cruz plans to fund pensions out of revenue from his proposed 10% flat tax and 16% value-added tax (VAT). This would represent a revolutionary change because up to now, Social Security has been largely financed out of its own dedicated revenue stream. By eliminating the independent funding stream, Cruz will sever the perceived link between workers’ contributions and the benefits they ultimately receive. Most observers agree with Franklin Roosevelt that the strong link between contributions and benefits is a vital source of the enduring popularity of the program. Social Security is an earned benefit for retirees rather than a welfare check.

Gov. John Kasich does not propose to boost the retirement age, but he does suggest slowing the growth in future pensions by linking workers’ initial pensions to price changes instead of wage changes. He hints he will impose a means test in calculating pensions, reducing the monthly pensions payable to retirees who have high current incomes. Many students of Social Security think this a bad idea, because it can discourage workers from saving for retirement.

All of the Republican candidates, except Trump, think Social Security’s salvation lies in lower benefit payouts. Nobody mentions higher contributions as part of the solution. In contrast, both Democratic candidates propose raising payroll or other taxes on workers who have incomes above the maximum earnings now subject to Social Security contributions. This reform enjoys broad support among voters, most of whom do not expect to pay higher taxes if the income limit on contributions is lifted. Sen. Bernie Sanders would immediately spend some of the extra revenue on benefit increases for current beneficiaries, but his proposed tax hike on high-income contributors would raise enough money to postpone the year of Trust Fund depletion by about 40 years. Hillary Clinton is less specific about the tax increases and benefit improvements she favors. Like Sanders, however, she would vigorously oppose benefit cuts.

None of the candidates has given us a detailed plan to eliminate Social Security’s funding imbalance. At this stage, it’s not obvious such a plan would be helpful, since the legislative debate to overhaul Social Security won’t begin anytime soon. Sanders has provided the most details about his policy intentions, but his actual plan is unlikely to receive much Congressional support without a massive political realignment. Cruz’s proposal, which calls for eliminating the Social Security payroll tax, also seems far outside the range of the politically feasible.

What we have learned from the GOP presidential debates so far is that Republican candidates, with the exception of Trump, favor balancing Social Security through future benefit cuts, possibly targeted on higher income workers, while Democratic candidates want to protect current benefit promises and will do so with tax hikes on high-income workers. There is no overlap in the two parties’ proposals, and this accounts for Washington’s failure to close Social Security’s funding gap.

Editor’s note: This piece originally appeared in Fortune.

Authors

Publication: Fortune
Image Source: © Scott Morgan / Reuters
      
 
 




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What did ASEAN meetings reveal about US engagement in Southeast Asia?

Just back from Southeast Asia, Senior Fellow Jonathan Stromseth reports on the outcomes from the annual ASEAN (Association of Southeast Asian Nations) summit, including the continued delay of the Regional Comprehensive Economic Partnership, China's economic influence in the region, and how the Trump administration's rhetoric and actions are being perceived in the region. http://directory.libsyn.com/episode/index/id/11923064 Related…

       




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What Indian politicians, bureaucrats and military really think about each other