Because wages have been rising about 1 percentage point a year faster than prices, the change would mean that retirement benefits for middle- and upper-middle-class Americans would climb in nominal terms much more slowly than currently promised.Under the assumption that only the government can provide the vehicle for rearranging your consumption over time. But I would think that middle- and upper-middle-class Americans who have provided themselves capable for earning a good income, are just as capable of figuring out how to smooth their consumption over time. Unless they want to take the plunge.
While the buying power of those monthly benefits, adjusted for inflation, would remain steady, they would replace smaller and smaller shares of a person's working wages.
As a result, people without other sources of retirement income would experience a sharp plunge in their living standards as soon as they stopped working. Compared with future working Americans, such retirees living during the same period would slip further and further behind.
Under Mr. Pozen's plan, for example, Social Security benefits for a typical low-income worker - someone making $16,000 today - would keep pace with wages and continue to replace about 49 percent of the person's working income.
But people with incomes in the top 70 percent of the earnings ladder would experience big changes.
Society has a moral obligation to the poor. Society does not have an obligation to maintain you in the style to which you have become accustomed.
What's the fear? That once we wean most Americans off of Social Security the political support for it will evaporate. If so, it sounds to me like the presumption is voters are ethically challenged. And that sounds like a job for religion, not for government.