Advocacy

AARP Publishes a Study to Show Only What It Wants to Show

 

Kudos to Andrew Biggs of the American Enterprise Institute for exposing AARP’s sham study showing the economic benefits of Social Security.

The AARP study is intended to demonstrate the economic benefits of Social Security in the hope of staving off any future benefit cuts to seniors. As the study points out, the Social Security trustees inform us that the Social Security Trust Fund—speaking of “shams”—will run out of money (that it doesn’t have) in 2033. Whereupon Social Security could only pay about 75 percent of the current benefit level.

AARP wants lawmakers to know that seniors often have low incomes, depend on their Social Security checks and will spend most of it. All of which is true. And so the AARP study tries to calculate the impact of that spending on the economy.

But the AARP study only focuses on the spending side of the equation. It ignores the fact that current workers must pay 12.4 percent of their income in Social Security payroll taxes—one of the most regressive U.S. taxes. That money is promptly redistributed to seniors.

Actually, the study does mention the exclusion—tucked away in the methodology where no one will see it. “Moreover, any ‘net’ analysis would be greatly complicated by the fact that behavioral responses of individuals to the elimination of the Social Security program would be extremely difficult to predict.”

Translation: Measuring the net effect—i.e., the negative impact of the taxes versus the positive impact of the spending—is “complicated,” so forget it.

This would be like a CFO explaining to the stockholders and the media that focusing on the company’s liabilities would be difficult, so he’s only going to highlight the company’s assets.

Before the government can give a senior a dollar, it has to take that dollar away from someone. Many of those who pay those payroll taxes are also middle and lower income people who need, and would spend, that dollar just as much as a senior. The net effect of Social Security is probably closer to zero, and may even be negative, considering administrative costs and the fact that the tax comes from workers, who are more likely to invest it productively.

Most people, and certainly the press, pay virtually no attention to the methodology. They just look at the headline and would not realize that there are real costs to real people. And AARP has no intention of informing them.

AARP has published a study to demonstrate how much the economy benefits when Paul is given a dollar, and completely ignores that Peter has been robbed.


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Texas Granny
8 years ago

I just joined AMAC in September because it was recommended by Glen Beck. But, after reading this article, I am asking myself, “What did I just do?” I realize that the pyramid is now turning upside down and I was too busy working, raising my children, trying to help my aging parents, paying MY bills (without the help of government). I wanted to work until 66 but my company had other plans. I am sorry that the younger generation has to struggle, but guess what? I still have to. I work part time, over half of my savings disappeared. If you think things are tough, wait a few years.
PRAY for our enemies, do good to them who persecute you.

H McLane
8 years ago

I am a retired senior citizen, a devout conservative & very worried about what this liberal party is doing to our gov’t. However, when conservatives/republicans speak about social security as being an “entitlement” I get mad. I have paid into social security all my working life with the understanding the money would be in a “lockbox” for safe keeping for my generation. I have read that this “lockbox” was plundered by a previous administration & replaced with IOU’s. This money should have been drawing interest or being invested in safe investments the past 40-50 yrs therefore GROWING. Now the gov’t is having to pay that money back & everyone forgets this is our money not an entitlement. Working people in the 18 to 40’s age range need to know the facts about what had been done to the social security system before they complain about it. Senior Citizens should not be punished with less medicare coverage & extremely low or no yearly increases in their income because past administrations have mismanaged our SS payments.

The real “entitlement” is Welfare & Medicaid because a VERY large number of these recipients have lived off Welfare their entire lives & never worked therefore have not paid into the program. Where is the OUTRAGE in that? I don’t see it on Fox or any articles I have read recently. Not so for the majority of BABY BOOMERS. I live in the REAL world & everyone who does, knows this is how welfare really works. When an 18 yr old graduates from high school, applies for welfare the very next day & is approved without even trying to get a job then this is what I call abuse. When girls/women have baby after baby, does not work & are given so many diapers, cans of formula & baby food they can’t use it all they are either give the excess away or sell it, this is what I call waste!

I agree welfare assistance & medicaid are good programs as a safety net (when the need is verified) but only to help get people back on their feet which is what it was intended to do. The welfare program has morphed into something totally different than that. WHEN ABLE BODIED men & women are allowed to stay on welfare (and all the other assistance programs paid by our taxes) availabe to them, that is a waste! Where is the OUTRAGE in that? SOME families may still need PARTIAL assistance to get them above poverty but they still need to work. There are senior citizens who receive only $800 or $1000 a month & these peoe do need welfare assistance as they are NOT ABLE BODIED. How many people can buy food & medicines (co-pays can run pretty high for some Meds) & have enough to live on. If the ABLE BODIED people were made to get a job this program would not be so burdensome.

I will support AMAC as long as it stays true to the conservative values & doesn’t do what AARP has done.
which is only for the money. I would like to see all conservative senior citizens eligible to join AMAC drop AARP membership & join AMAC. I am sure there are lot of them who did not or do not know AARP leadership is a Liberal organization & now have an alternative. I am dropping my medicare advantage plan from United Healthcare who is endorsed by AARP & going with a different ins co. UHC has shown they do not really care about the healthcare of senior citizens. They are a puppet of the Obama administration just like AARP.

Mike
8 years ago

While all of the stated facts in this article are true, let’s not for get that in my case and in the case of so many other Americans there is no “robbing Peter to pay Paul”. SS owes us. We paid the tab in full and then some. In our case, SS merely owe us the money back that they took from us in the first place. Don’t get me wrong; I have plenty of problems with SS and if it started to get phased out today; fine. However, many of us were lied to and coerced into paying for SS for decades. In real dollars, we paid the US Government to give THEM a loan! What they did with the money was and is sinful. Still, to all of the people that paid into it, THEY SHOULD GET THEIR MONEY BACK because their money was confiscated by a nefarious gang of crooks in D.C. at the very real threat of the heavy hand of the Federal Government. What we need to do is to force the gov. to make good on their promises and to limit the amount of promises that they are allowed to make. Hey, that sounds like a limited Government bound down by the chains of the Constitution. What a revolutionary idea!

Bill
8 years ago
Reply to  Mike

Amen Mike! I belong to AARP and would gladly change to AMAC. But until they quit calling my SS an entitlement and tell it the way it is I will not join up. Please change your stance on this AMAC, be a true advocate for the 50 plus crowd.

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