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commission, they have made a career out of promoting their own proposal
which they misleadingly imply was a report of the commission.
A Traveling Cash Cow
According to the New York Times, Bowles and Simpson get $40,000
each for speaking engagements where they push their agenda. This price
tag tells us everything we need to know about what is going on here.
While $40,000 might not be big money among the people with whom
Mr. Bowles and Mr. Simpson socialize, it sure is to the rest of us. This is a
couple of thousand dollars more than the typical worker earns in a year. It
is a bit less than three times the average annual Social Security benefit.
And Bowles and Simpson get this money for spending an hour or so
giving their tirade about the desperate need for reducing the deficit.
The incredible irony of these sorts of fees is that the substance of the
Bowles-Simpson tirade is that paying for Social Security and Medicare
will bankrupt our children and grandchildren. The two of them are running
around the country telling people that Social Security checks to retirees
that average $15,000 a year and providing health care insurance to seniors
who have spent their lives working will have our children and
grandchildren living in poverty.
Behind the Fees
To sell this line, Bowles and Simpson must be betting that they have
some really poorly educated young people in their audience. If they
learned their grade school arithmetic, they would quickly recognize these
two for the hucksters they are.
The Social Security Trustees project that real wages, that means the
growth in wages after adjusting for inflation, will grow on average by
more than 40 percent over the next 30 years. This means that if a typical
worker is making $38,000 in 2012, then a typical worker would be earning
more than $53,200 in 2042, in today's dollars.
By comparison, the trustees report tells us that if we want to have
Social Security fully funded for the rest of the century, it would take a tax
increase of 1.3 percent on both the worker and the employer. This assumes
that we make up the projected shortfall entirely by raising the payroll tax,
as opposed to say, raising the cap on wages (currently around $110,000)