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Not By Age, But Life Expectancy

by Christopher Chantrill
October 23, 2007 at 4:10 pm

THE GOVERNMENT’S entitlements like Social Security are based on age entitlements.  At age 62 you can get early retirement on Social Security.  At age 65 you start Medicare.  But government researchers are looking at another approach, writes Tyler Cowen at Marginal Revolution

The current practice of measuring age as years-since-birth, both in common practice and in the law, rather than alternative measures reflecting a person’s stage in the lifecycle distorts important behavior such as retirement, saving, and the discussion of dependency ratios.

Get the idea?  Change the entitlement for Social Security from age 62 to the age at which you have a 15 year life expectancy. 

The chaps at Marginal Revolution seem to think this is a great idea.  But I wonder.

As a 61 year-old, I really don’t want to be forced to work until 70 or something before I get my Social Security.  The fact is that most people, once they have raised their children, start to slow down.  And our brains, as well as our bodies, slow down too.  We get ready to get out of the rat race.  If only we could.

Of course, with a judicious combination of work and savings, I can adjust my work effort and income to suit myself.  But with a mechanical government program, that’s not possible.  Somebody else sets the rules.  And the rules are not necessarily in anyone’s best interest.

In fact, the trouble with the government’s entitlement programs is that they respond only too readily to the universal human willingness to live at the expense of others.

Hey!  I’ve worked hard for ___ (fill in the blank) years.  I deserve it.  The folks in Europe certainly do.

And once you have the government program in place then you are reduced to arguing over whether to juggle the benefits this way or that way, or change the eligibility upwards or downwards.  Individuals and families are not longer in control.  But the monster stays.

The entitlement problem will not be solved by mechanical means, juggling this or that parameter.  It will be solved by raw political power.

That may not be a pretty sight.

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Christopher Chantrill blogs at www.roadtothemiddleclass.com.  His Road to the Middle Class is forthcoming.


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©2007 Christopher Chantrill