Social Security Peg Is a Fix Boomers Can Embrace: Amity Shlaes
By Amity Shlaes
Oct. 18 (Bloomberg) — High tide is a mystical moment for a lot of us. We actually stand on the beach hoping to capture that second when the foam reaches farthest up on the sand.
Another kind of high tide is sweeping the country these days. It is the high tide of Social Security money.
On Oct. 15 the first baby boomer demonstrated she’s ready for more beach-time by applying for a Social Security pension. Kathleen Casey-Kirschling, born on Jan. 1, 1946, leads millions like her. As the boomers head for the beach, the revenue flowing to the government will begin to recede.
Many Americans believe that shift is important — catastrophic even. They also think that there’s nothing they can do but watch.
Don’t worry about losing your Social Security (SSA) benefits in 2040 or 2050. Three quarters of a million American citizens are already losing theirs.
Every month, the Social Security Administration either mails off or direct-deposits payments to American retirees living overseas. Apparently, more SSA checks are sent to Polish-American recipients in Warsaw, Poland than any city in the world except Chicago. Huge numbers of foreign-born Americans retire back to their country of origin after a working life in the United States. Hundreds of thousand of others choose to live in countries where the cost of living affords them a sustainable lifestyle.
. . .To get down to the nitty as well as the gritty, when my buddy moved to Europe just at the end of the Clinton administration, the dollar was convertible to 42 Czech crowns. Renting a flat in Prague, if you were careful, cost about 10,000 crowns–$238 bucks. Dinner out could be had for $4 and that included a glass of house wine and a tip. A movie was $1.25, an unlimited tram/metro pass for a whole year cost $60 and walking the incredibly beautiful streets of one of Europe’s most famous and historic cities was not only safe, but cost not a dime.
. . . During six years in Prague, Czech prices have gone up about 20% (a moderate 3% annual increase) and the dollar has dropped by half. The combination of those circumstances have boosted the $238 flat to $631, the $4 dinner to $10.60, a movie to $3.30 and a yearly tram pass to $159. Suddenly travel is out of the question and those casual stops at the bookstore are a thing of the past.
. . . The last place to realize its society is in shambles is the society itself—Americans in America.
It may be that the first to know are Americans outside America—they’ve seen their native currency through desperately clear eyes. And, to paraphrase the commentary about Maine as a bellwether state,
“as the currency goes, so goes the nation.”