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Social Security in trouble over long lives

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Kai Ryssdal: I have this economic indicator to try to wrap you brain around: The Treasury Department announced yesterday that the federal budget deficit for February was almost $221 billion. That’s February, a single month. It is bigger than the yearly budget gap was not all that long ago. There are, of course, wars to pay for, the stimulus package and the bailouts as well. But commentator Todd Buchholz says we ought to be paying attention to something else, too.

TODD BUCHHOLZ: What’s the toughest job in Washington this year? Toyota’s customer relations phone operator? John Edwards’ outplacement counselor?

No, the toughest job is talking about Social Security and Medicare without either scaring people or watching their eyes glaze over. Though this is radio, I can almost see your pupils retreating back into your head. Yet with the budget exploding, it’s the real moose in the room.

When Franklin Roosevelt set the Social Security retirement age at 65, the average 65-year-old was dead. Life expectancy was less than 65. That’s why the numbers worked. But now we’re living longer.

No one would be so heartless or stupid to walk up to a 65-year-old woman at her retirement party and say, “Guess what Aunt Harriet, we know you’ve been counting on Social Security, but we’ve decided to reform. You’re on your own.”

Likewise, would anyone be so stupid to go up to 12-year-old Jake, who just finished his paper route and say, “Jake, we know you’ve been counting on Social Security all your working life, so it would be cruel to change Social Security and Medicare since you’re so dependent on them.”

The kid has 60-70 years to get ready. Americans must decide at what age people have enough time to save for their own retirements. I know the answer is not 65. But I also know the answer is not 12 either. We just need to agree. Then young workers can make regular deposits to buy an annuity that will cover future medical care and living expenses. If we steady our rocky federal finances, the government can match those contributions.

Personal accounts will come someday. The only question is whether we wait till the whole country looks like a crowded pawn shop, and we’re just rolling the dice like Nathan Detroit trying to get lucky.

RYSSDAL: Todd Buchholz was an economic adviser to the first President Bush. His latest book is called “New Ideas From Dead CEOs.”

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