There are a million ways to fix Social Security. But progressive have a favorite: eliminating the $176,100 cap on earnings hit by the 12.4% payroll tax.

But who would pay those extra taxes? Or, more accurately, where do they live? /1 The answer is: mostly in Blue States. They have more high earners and a higher cost of living, meaning more would see a tax increase if the Social Security payroll tax ceiling where eliminated. /2

I'm the optimist when it comes to retirement security. In fact, I wrote an entire book claiming the so-called "retirement crisis" is false.

But did I forget something major? /1 @aeiecon
amazon.com/Real-Retiremen… A new @MorningstarInc report argues that the optimistic picture of retirement incomes looks plausible when you ignore long-term care costs, such as nursing homes.

But when long-term care costs are counted, the familiar retirement crisis story reappears./2
morningstar.com/business/insig…

I'm not sure why Rich generated these figures using the Current Population Survey, which the Census Bureau has confirmed dramatically overstates elderly poverty and distorts poverty trends over time. A quick thread to explain. /1

https://twitter.com/tghilarducci/status/1821637446079336717

First, the CPS counts "money income," which includes only regular payments such as Social Security and traditional pensions. As-needed withdrawals from IRAs or 401ks are *not* counted as income in these figures. This 2014 @wsj op-ed explains. /2
wsj.com/articles/andre…

The short story: the 2024 #SocialSecurity Trustees Report shows improvements. Trust fund exhaustion delayed 1 year to 2035. Long-run funding gap down by 3%. Benefit cut when TF runs out reduced from 23% to 17%.

That's good! /1
ssa.gov/news/press/rel… What happened?

Mostly, the economy today has been stronger than it previously was projected to be. If more people are working and earning more, that's a stronger starting point for the projections going forward. /2

This will only add to my unpopularity, and yet a short thread follows...

https://twitter.com/MtnMama406/status/1757788007850217716

First, the MAIN reason Social Security faces a massive funding deficit is that past and even current participants receive significantly more benefits than they paid in taxes + interest. It was a great deal for them, but that makes it a poorer deal going forward.

@BobStein_FT This thread is 100% correct (possibly more). Which for me has long implied that Social Security reform needs to break out of the traditional menu of common options (retirement age, COLA cuts, etc.) if it's to produce retirement security at reasonable cost. Some ideas. /1 @BobStein_FT /2 Social Security is the largest federal program not because a safety net is expensive, but because high benefits for middle/upper income retirees are. If Social Security simply paid everyone a poverty-level benefit, old age poverty would fall to zero and costs drop by half.

I have a new working paper that overcomes some of the weaknesses in traditional methods of analyzing the adequacy of teacher salaries. Thread to follow.

aei.org/research-produ… Some studies, such as from @economicpolicy, find that teachers receive salaries ~20% lower than other workers with similar levels of education (and other attributes). Many people accept that conclusion – why wouldn’t they?
epi.org/publication/te…

I'm in Monday's @wsj writing about Joe Biden's Social Security plan. Biden says the right things about the need to save Social Security. But his plan adds just 5 years to Social Security's solvency. Why? /1

wsj.com/articles/the-h… /2 Biden's plan includes large tax increases, which hit the rich immediately & will hit the upper middle class as the plan is fully implemented. The all-in US top marginal tax rate could hit 60% when state/local taxes are included.

There have been lots of takes on @oren_cass's Cost of Thriving Index. Here's mine, limited to a basic point:

If rising housing, health, transportation & college costs have squeezed middle class families, I'd expect to see them spending less on purely discretionary items. 1/

https://twitter.com/oren_cass/status/1230505649794166785

@oren_cass 2/ To check, I pulled Consumer Expenditure Survey data on household spending on entertainment & charitable contributions/gifts, by household income quintile. I converted to real dollars and measured the change from 1984-2018.

A short thread on why there's no retirement crisis:

1. CBO data show that since 1979, retiree incomes have grown much faster than incomes for working-age households. This is true not just on average, but at different points of the income distribution.

marketwatch.com/story/fears-of… 2. Poverty in old age is sharply lower today than in the past, and a bunch of surveys those that big majorities of current retirees feel financially secure & are able to maintain their pre-retirement standard of living.