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Great economic theory or craziness? Reduce the retirement age to lower unemployment rate

unemployment-_optBY BOB HOLT
NEWJERSEYNEWSROOM.COM

University of Texas economist James Galbraith has his own idea to help lower the country’s unemployment rate- cut the number of workers in the market.

Galbraith believes the retirement age for workers should be lowered- temporarily.

He suggests, according to Money News, “Make the early retirement available for a limited period, let's say three years … and let the people who take it at 62 get a better deal than they get now so that a higher fraction of the working population will take it at 62.”

Currently workers can retire with full Social Security benefits at 67. In a piece called “Actually, The Retirement Age is Too High” on foreignpolicy.com, Galbraith explains that the economic slowdown has left the United States with 11 million fewer jobs than it needs.

“Older people who would like to retire and would do so if they could afford it should get some help,” he said. “With a secure pension and medical care, they will be happier. Young people who need work will be happier. And there will also be more jobs.”

Galbraith disputes reasons for raising retirement age by arguing that non-wealthy elderly are not living longer. According to the Daily Kos, he also says a lot of workers retire because they can't find employment, and extending retirement age is an exercise in futility.

And he adds that the U.S. doesn’t need the extra workers, due to productivity gains and cheap imports on the goods we use most.

As far as budget forecasts that say entitlement costs are overtaking the Gross Domestic Product, Galbraith says that in reality there's no way for healthcare costs to get this big while not also boosting nominal GDP significantly, according to Business Insider.

 

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