As if the U.S. economy needed any more inflation, a pair of economists have identified another type that could prove just as damaging to long-run U.S. growth as rising consumer prices: age inflation, according to the Wall Street Journal.
The Journal reports that in a National Bureau of Economic Research paper Tuesday, economists John Shoven and Gopi Shah Goda estimate that absent adjustment for higher life expectancies, the percentage of the U.S. population eligible for full Social Security benefits would climb by 2050 to about 20 percent. The same percentage is true for Medicare, according to the story. That’s much higher than if eligibility ages had been indexed for mortality improvements.
“Accounting for higher life expectancies, ‘the Normal Retirement Age for Social Security in 2004 would have to be at least 71 … and more likely 73 or 74′ to be consistent with the retirement age of 65 in 1935,” the authors wrote.