Amity Shlaes does us all a favor by reminding us of the actual purpose of social security: in FDR's words, to provide "some measure of protection to the average citizen and to his family." That's it. Not total security. Not a total guarantee that the gold-plated benefits of the late-century will keep growing and growing. And not a peg to wages rather than prices, linking retirees to current wage-earners rather than actual needs.Gold plated? The average Social Security benefit last year was $12,024. Medicare premiums of $1,454 are automatically subtracted, leaving a net benefit of $10,570.
That's $881 per month. There are lots of things you can call that, but "gold plated" isn't one of them.
Oh, and one other thing. The average benefit in 1960 was $981. If benefits had increased only at the rate of price inflation, today's benefit would be $6,680. Subtract the Medicare premium and divide by 12 and the monthly benefit works out to $435. I think I'll stick with the current formula.