A clear illustration of how Wall Street banks helped cause the crisis by encouraging subprime lenders to make risky loans.

At the same time, wages have been stagnating or decreasing, and pensions have been decreased or eliminated.

http://www.alternet.org/books/how-congress-has-already-cut-your-social-security-benefits

Dec. 24, 2014
By Nancy J. Altman, Eric R. Kingson

(Editor’s note: The following is an excerpt from a new book, “Social Security Works! Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All,” published by The New Press, 2015, all rights reserved. Order a copy here.)

It’s not widely recognized, but Social Security is gradually weakening. Still the most important source of retirement income for the vast majority, Social Security benefits have been chipped away, and will be roughly 24 percent lower for workers born after 1959.

Here’s why.

In 1983 Congress passed legislation that included significant reductions in benefits. Very importantly, the 1983 legislation raised Social Security’s full retirement age from age 65 to 67, a change that is still being phased in. The 1983 amendments set the Social Security “full retirement age” at 66, gradually phased in for those born in 1943 through 1954. It will then gradually increase to age 67, fully phased in for those born after 1959.

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because of the way that Social Security benefits are calculated, raising the age defined in the Social Security Act as the “retirement age” by one year is mathematically indistinguishable from about a 6.5 percent cut in retirement benefits, whether one retires at age 62, 67, 70, or any age in between. Raising the statutorily defined retirement age sounds like it should mean that if you work longer, you will eventually get what you would have gotten. But you never actually do catch up. If the definition of retirement age is changed to be an older age, you always get less than you would have without the change.

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The 1983 enactment, which gradually phases in a two-year increase in the full retirement age from age 65 to age 67, has already lowered benefits by around 6.5 percent. When fully phased in, the change will cut the benefits of those born in 1960 or later by around 13 percent.

In addition to increasing the full retirement age, the 1983 legislation delayed the annual automatic cost of living adjustment by six months, from June to January. Again, it’s a bit complicated to understand without knowing the details of benefit calculations, but this delay translates into a 1.4 percent cut for everyone, now and in the future.

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In addition to increasing the full retirement age, the 1983 legislation delayed the annual automatic cost of living adjustment by six months, from June to January. Again, it’s a bit complicated to understand without knowing the details of benefit calculations, but this delay translates into a 1.4 percent cut for everyone, now and in the future.

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