Paul Krugman: Expand Social Security!

Paul Krugman: Expand Social Security!

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The second argument Krugman tackles, put forward recently by the Washington Post, is that the poverty rate for seniors is low — the implication being that they don’t need further assistance, anyway. Krugman’s response is to note that the official measurement of poverty among seniors is widely seen as flawed, and flawed in a way that underestimates levels of senior poverty. While many believe the poverty rate among seniors to be 9 percent, Krugman says it’s more likely around 15 percent. And what’s more, it’s likely to increase in the years ahead as more struggling retirees enter the system.

But the biggest reason to expand Social Security, Krugman says, is the failure of 401(k)s. “At this point,” Krugman writes, “it’s clear that the shift to 401(k)s was a gigantic failure. Employers took advantage of the switch to surreptitiously cut benefits; investment returns have been far lower than workers were told to expect; and, to be fair, many people haven’t managed their money wisely.”