Playing on the Third Rail Could Ease Current Deficit Issues

The Washington Post had an excellent article up yesterday about a topic loyal readers will recognize; social security reform. In the past, Blawgconomics has advocated for an increase in the retirement age for social security benefits (and at its own detriment it should be added). As a political football, the 'third rail' of politics has long been seen as untouchable. Regardless of how reform plans are structured, people are simply terrified by the coupling of the word reduction with the term benefits.

However, in an incredibly difficult economic environment and with the general public seemingly exhibiting an unprecedented level of comprehension that things need to change, the time may be ripe for reform. That is good, as the system as it is currently configured is unsustainable, and as its potential collapse has implications for the health of the broader economy which must be addressed proactively if success is the ultimate goal.

Luckily it appears that both sides of the aisle are behind the idea of raising the retirement age, a critical ingredient if change is to occur, particularly in an election year. Reform as it is being discussed in the press seems to be headed down the right path. For example, current benefits would not be impacted, and the retirement age would only be raised for citizens who are under a certain age, most likely 50, currently. These key points produce the dual benefits of not creating political pressure against reform by groups like the AARP while giving younger people a chance to plan ahead for a higher retirement age. This only makes sense as overall life spans increase and as it is the only hope for the plan to exist at all by the time Generations X and Y are ready to tap into it.

With stimulus spending and health care reforms, it sometimes seems that new and entrenched liabilities are created at two or three times the rate that they are eliminated. Therefore, reform is no small feat. However, here's hoping that political squabbling can be put aside. Changing the retirement age for social security benefits is a worthy endeavor that would help provide a solution to some of the problems of both today and the future.