In the article you linked to, Krugman doesn’t forecast that aging will decrease. He just wonders about it for one sentence and then sets it aside. Has he forecasted it will decrease elsewhere?
The problem the Fed has is they were targeting inflation 2% until 2021 and then they stopped targeting it. They let it run up a bunch thinking they could catch it quickly. The big mystery to me in mid-2021 was why they were still doing QE when it was clear that the stock and housing markets had recovered. Stopping QE mid 2021 could have slowed down housing purchases and prices. Instead they stopped buying bonds at the same time they raised interest rates in March 2022 sand lost 9 months of inflation fighting. QE should have been stopped Q3 2021 and Fed Funds rate should have started to rise in Q4 2021 if they were actually making an attempt to target inflation. We don't have a Fed Funds rate higher than YoY CPI even now.
My spouse's teacher pension has a simple formula where the first $18k has a partial inflation adjustment of half the rate of inflation with a minimum add on of 1%/year and a max of 3%/year. The rest of the pension is fixed. In addition to expanding the base, Social Security could be restructured with something like that where some base amount (poverty line?, amount a lifetime median income earner would receive?) could be adjusted for inflation annually and everything above that base would not be increased for inflation. If you are going to get the maximum Social Security benefit, you will have made well over $100k/year ($2022) for a substantial portion of your career and should have been able to save money. That might make up a bunch of the missing 25% after increasing the earnings base.
In the article you linked to, Krugman doesn’t forecast that aging will decrease. He just wonders about it for one sentence and then sets it aside. Has he forecasted it will decrease elsewhere?
The problem the Fed has is they were targeting inflation 2% until 2021 and then they stopped targeting it. They let it run up a bunch thinking they could catch it quickly. The big mystery to me in mid-2021 was why they were still doing QE when it was clear that the stock and housing markets had recovered. Stopping QE mid 2021 could have slowed down housing purchases and prices. Instead they stopped buying bonds at the same time they raised interest rates in March 2022 sand lost 9 months of inflation fighting. QE should have been stopped Q3 2021 and Fed Funds rate should have started to rise in Q4 2021 if they were actually making an attempt to target inflation. We don't have a Fed Funds rate higher than YoY CPI even now.
My spouse's teacher pension has a simple formula where the first $18k has a partial inflation adjustment of half the rate of inflation with a minimum add on of 1%/year and a max of 3%/year. The rest of the pension is fixed. In addition to expanding the base, Social Security could be restructured with something like that where some base amount (poverty line?, amount a lifetime median income earner would receive?) could be adjusted for inflation annually and everything above that base would not be increased for inflation. If you are going to get the maximum Social Security benefit, you will have made well over $100k/year ($2022) for a substantial portion of your career and should have been able to save money. That might make up a bunch of the missing 25% after increasing the earnings base.