A welcome advance on Social Security
by David Atkins
Via Kevin Drum, the New America Foundation has responded to the austerity cult by proposing an expansion of Social Security:
We propose to replace most of the country’s current, inadequate, hybrid public and private retirement system with a two-part, wholly public system called Expanded Social Security. Expanded Social Security would have two distinct parts. The first part, Social Security A, would be similar to the current Social Security Old Age and Survivors Insurance (OASI) program, which provides a retirement benefit related to earnings. The second part of Expanded Social Security would be a new universal flat benefit, Social Security B, to supplement the traditional earnings-related benefit that would continue to be provided by Social Security A.
Drum notes, however, that it would cost 5% of GDP to accomplish it and require some sort of value added tax. Honestly, 1/20th of GDP doesn't sound like a lot in order to ensure a decent, basic retirement income for all Americans. As a progressive, I'd be fine paying higher taxes for it.
But there's certainly a sticker shock involved. Which is why the anti-austerity conversation can't be separated from the income inequality conversation. When the wealthy swallow up all the productivity gains in an economy, it's hard to ask average people to pitch in significantly extra for their own economic security. That money should by rights come from the people who have stolen all the GDP gains since 1980 in the first place.
And if those people threaten to flee the country, then it may be time for international law to deal with tax flight by the jet set.
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