The latest “Economic Beat” column from Barron’s Gene Epstein explains how different inflation measures can influence Social Security costs. Epstein points out that measures such as the Consumer Price Index, CPI-W, CPI-U, and CPI-E all have inherent problems when trying to gauge inflation accurately.
DOES THIS MEAN there is no way to put a brake on the cost of entitlement programs? Not if we reform all of them to serve only those people clearly in need. The idea is called means-testing or, as radical reformer Peter Peterson has called it, affluence-testing.
The government can no longer afford to subsidize the affluent, assuming that it ever should have. Peterson proposed imposing affluence-testing on all government benefits, whatever the age of the recipient, including Social Security, Medicare, military and civil-service pensions, housing subsidies, unemployment compensation, and subsidies to rich farmers.
As a cost-saving measure, it’s an idea whose time came long ago.
