Posted on 12/30/2004 7:27:03 PM PST by neverdem
WASHINGTON, Dec. 30 - When the federal government assesses the long-term financial problems of Social Security, it assumes that increases in life expectancy will be slow and measured. But many population experts say they believe that Americans' life expectancy will increase rapidly in the 21st century, making the program's financial problems even worse.
President Bush and Congress are preparing for a debate over the future of Social Security, whose solvency depends not only on factors including productivity, inflation and birth rates but also on how long beneficiaries will be living.
Life expectancy at birth increased by 30 years in the last century, and many independent demographers, citing the promise of biomedical research and the experience of some other industrialized countries, predict significant increases in this century. The Social Security Administration foresees a much slower rise.
"Life expectancy will make a very big difference in the fiscal viability of Social Security, but the agency's projections of longevity appear too conservative," said Prof. Samuel H. Preston of the University of Pennsylvania, one of the world's leading demographers.
Dr. Preston said the agency assumed that "past advances in life expectancy are unrepeatable, even though the medical research establishment is routinely producing important breakthroughs that reduce the incidence or fatality of a variety of diseases."
Richard M. Suzman, associate director of the National Institute on Aging, a unit of the National Institutes of Health, said: "There is a long history of government actuaries and statisticians underestimating future gains in life expectancy. The United States is unfortunately well below the outer limits of life expectancy. Other countries are doing much better. That gives us an indication of the potential room for improvement."
Tables published by the government's National Center for Health Statistics show that life expectancy at birth was 47.3 years in 1900, rose to 68.2 by 1950 and reached 77.3 in 2002. The latest annual report of the Social Security trustees projects that life expectancy will increase just six years in the next seven decades, to 83 in 2075. A separate set of projections, by the Census Bureau, shows more rapid growth.
The Social Security Administration says male life expectancy at birth will be 81.2 years in 2075. The Census Bureau, using different methods and assumptions, says that level will be reached much earlier, in 2050.
Likewise, Social Security says female life expectancy will reach 85 years by 2075, while the Census Bureau says it will exceed 86 in 2050.
For the American population as a whole in the last century, most of the gains in life expectancy at birth occurred from 1900 to 1950. But most of the gains in life expectancy among people who had already reached age 65 were seen after 1950.
Last year an expert panel advising the Social Security Administration found "an unprecedented reduction in certain forms of old-age mortality, especially cardiovascular disease, beginning in the late 1960's."
The panel said Social Security was wrong to assume a slower decline in mortality rates among the elderly in the next 75 years. Rather, it said, the government should assume that mortality will continue to decline as it did from 1950 to 2000.
Ronald D. Lee, a professor of demography and economics at the University of California, Berkeley, said: "I foresee death rates of the elderly in the United States continuing to decline at the same pace they have declined since 1950. In fact, there is evidence that the pace of decline in other developed countries has accelerated in recent decades."
The Social Security Administration defends its assumptions.
"There is a wide range of opinion among experts on this issue," said Mark Hinkle, a spokesman for the agency. "In the last few years, we've moved a bit closer to the position of other agencies and demographers."
Some experts say other factors could ease the effects of longer life on Social Security's solvency.
"The higher costs associated with longer life expectancy could be offset in several ways that do not involve a reduction of Social Security benefits," said John R. Wilmoth, another demographer at Berkeley.
People who live longer could work longer, for instance. Or the size of the working-age population could increase because of higher birth rates or a larger number of immigrants.
Further, some population experts foresee developments that could wind up buttressing the forecasts of the Social Security Administration. S. Jay Olshansky, a professor of epidemiology and biostatistics at the University of Illinois at Chicago, said the era of large increases in life expectancy might be nearing an end, with the spread of obesity and the possible re-emergence of deadly infectious diseases.
"There are no lifestyle changes, surgical procedures, vitamins, antioxidants, hormones or techniques of genetic engineering available today with the capacity to repeat the gains in life expectancy that were achieved in the 20th century" with antibiotics, vaccinations and improvements in sanitation, Dr. Olshansky said.
Indeed, he said, without new measures on obesity and communicable diseases, "human life expectancy could decline in the 21st century."
On the other hand, said James W. Vaupel, director of the program on population, policy and aging at Duke University, life expectancy in the United States is far from any natural or biological limits.
"Experts have repeatedly asserted that life expectancy is approaching a ceiling," Dr. Vaupel said. "These experts have repeatedly been proved wrong."
At various times, different countries have had the highest reported at-birth life expectancy. But with "remarkable regularity" over the last 160 years, Dr. Vaupel said, life expectancy in the leading country has increased an average of three months a year, or 2.5 years a decade.
David A. Wise, a Harvard professor who is director of the program on aging at the private, nonpartisan National Bureau of Economic Research, said: "Almost all demographers outside the government think that death rates will continue to fall faster than the decline incorporated in the projections of the Social Security Administration. Most think life expectancy will increase more rapidly than Social Security says. That's not good for the finances of Social Security."
Nor do economists generally foresee a reversal of the trend toward early retirement. Though researchers have observed a significant decline in chronic disability among the elderly, most workers retire and begin drawing Social Security benefits before they reach 65.
Labor unions and some politicians have resisted efforts to raise the eligibility age for full benefits. Such proposals, they say, penalize workers who have spent their lives in physically demanding jobs.
Alicia H. Munnell, director of the Center for Retirement Research at Boston College, said, "Increases in life expectancy at 65 have been a major contributor to the rising cost of Social Security." Future increases could strain pension plans and individual retirement savings, as well as Social Security, she said.
"The United States is the richest major country in the world in terms of per capita gross domestic product," Dr. Munnell said. "And life expectancy is clearly associated with income. But if you focus on life expectancy at age 65, the U.S. falls in the middle of the pack."
One reason, she said, is that "the United States is not so rich relative to its peers if you look at the average income going to the lowest 40 percent of the population."
If they create an immortality drug or even double life spans, then they'll have to totally rethink government's responsibility to senior citizens. I think we're on the verge of such breakthroughs.
The answer to this one is fairly simple. If folks live a lot longer, they will have to work longer.
Some of us have actually planned ahead and saved for retirement. Even if lifespans of hundreds of years were attained, it would be possible to save enough money in the first 60 years to live comfortably for the remainder.
Not if there is a mass demographic change, unless you are considerably richer than your peers. If fewer folks are working on a global basis as a percentage, then prices will go up, and it will be the producers who get relatively rich, and the geezers relatively poorer. There is no way out of that box.
The savings will likely be destroyed when the government tries to inflate its way out of the debt owed to those who didn't save.
Ain't Socialism Grand?
If robots do all the work, well then they can work at amusing each other, and their grandparents.
With what money?
Only Bill Gates and others like him will have any money.
The robots work for free, or at most, the minimum wage.
Anyone who has saved enough to live on the income from investments knows how to protect himself against inflation. Those with inherited wealth or people who got lucky will be hurt, but the only way to really save up enough is to use inflation.
I am anticipating that SS reform, W's spending policies, and the war on terror will create powerful inflationary forces.
That's why the best plan is a Buddy System with government employees at all levels. In this plan, a government "worker" gives half of his or her pension to a citizen who worked in the private sector and has no pension. This is only fair because people without pensions have been paying for pensioned government "workers" for their entire lives.
Sort of like systematically devaluing the dollar?
Your ideas then.
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