From: Mike Lorrey (mlorrey@yahoo.com)
Date: Sat Dec 07 2002 - 10:48:43 MST
--- "Camp, Christopher" <CCamp@omm.com> wrote:
> I did some research and found the following sources investigating the
> relationship between economic growth and life span.
>
>http://www.corp.aventis.com/future/downloads/PDF/fut0202/En_2_2002_heal
> th_and_wealth.pdf - a short overview on the relationship between
> health (life span included) and economic growth. The article
> mentions work done by the economists R.W. Fogel and Robert Barro.
> Barro claims that a 10% increase in life expectancy could translate
> to a 0.4% increase in econ growth.
Without a one to one relationship between life expectancy and economic
growth, or else an indexing of the retirement age to the average life
expectancy, these numbers would actually result in a decreasing
standard of living over time.
Any increase in life expectancy does not increase the number of
productive years that individuals have to contribute to the economy as
productive individuals. All it does is delay the day when the
individuals wealth is confiscated by the tax man when s/he dies, thus
allowing for private capital to generate more growth before it is
stolen and wasted on government expenditures.
Furthermore, since the individual is retired (and likely living off the
government dole) when they get to enjoy their increased life
expectancy, the amount of money that is stolen from productive
individuals (and therefore an increasing drag by government on the
economy) increases as well. The only cure for this vicious cycle is to
index the retirement age to the average life expectancy, say five years
below it minus half of any increase over time (i.e. if ALE is 75, you
can receive Soc. Sec. benefits at 70, while if ALE rises to 80, you
retire at 72.5, etc...).
The primary reason for the huge increases in government taxation in the
last century was not actually welfare for younger people, but increases
in life expectancy while retirement ages remained static. For example,
when the US SS retirement age was set to 65 in the middle part of the
century, average life expectancy was 62. ALE rose over the next couple
decades to 75 while retirement age remained at 65, causing a tenfold
increase in demand on government medical and social security
entitlements when the population only doubled.
This indexing is something I've been advocating since 1984, but
received little traction until the ARA was raised to 67 in the
mid-90's. It needs to rise more.
I got an interesting piece of mail last month from the SSA. It seems
that I've worked enough over the past 16 years that I have earned 38 of
the 40 credits I need to be able to retire if I become disabled (and my
income record is pretty thin, thanks to years of contract employment)
and I'm only 34. This would earn me $900 a month, apparently, in SS
benefits, which admittedly isn't much, if I were to live here in the US
(though this would be a six figure income equivalent in places like
Afghanistan). Perhaps by the end of this year I'll be fully qualified.
This is a bit early, isn't it, to be 'qualified' to receive SS
benefits, don't you think?
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