The Boston Globe’s Myth Creation on Social Security

[Hannah Bell]

The Boston Globe helped to create some new myths on Social Security with a piece by Robert C. Pozen that ran under the headline “Myth Busters: The Truth About Social Security Reform.”

Pozen first told readers that Social Security is not progressive even though its payback structure is highly progressive. A low-wage earner will get a payment equal to about 90 percent of their average wage income, while a maximum wage earner <$106,800 in 2010>, will get a benefit equal to less than 30 percent of their taxable wage...

The second myth created by Pozen’s piece is his claim that the proposed increase in the Social Security retirement age is no big deal...

The third myth created by Pozner is when he labels as a myth this claim: “The proposal would constitute a large “cut’’ in Social Security benefits for American workers.”

Before addressing the benefit schedule, it is worth noting Bowles-Simpson propose a change in the annual cost of living adjustment (COLA) that would amount to roughly a 3.0 percent cut in benefits for someone who lives 20 years after starting to collect benefits. Whether or not this is “large” can be debated.

However, it is worth noting that this proposed cut would have more impact on the after-tax income of most beneficiaries than the ending of the Bush tax cuts would have on most of the people who earn more than $250,000 a year...

http://www.cepr.net/index.php/beat-the-press/