Why do we want to encourage people to work longer in a time of high unemployment?

This is what many are proposing to do by raising the age at which you can receive social security payments.  It would seem to make more sense to encourage older workers to retire earlier rather than create incentives for them to work longer.  Note, no one is suggesting forcing people to retire.  For those who are able and want to continue working well into their senior years, there should be no impediments to their doing so.  But do we want to create a system that encourages people to work longer regardless of their desire.

The argument is that we have to do this to save social security.  Unless we increase the age at which workers can collect benefits, it is said the system will go bankrupt.  And if nothing else is done that appears to be true.  But there are other alternatives.

Many have proposed eliminating the cap on wages subject to social security taxation.  Currently that cap is $106,800.  It is indexed to match the growth in average wages.  But if we eliminated the cap entirely, everyone agrees this would create a substantial increase in revenues for the system.  The question is how much.

Since social security benefits are tied to how much you pay in, eliminating the cap on wages subject to social security taxation would increase benefit levels to high end wage earners thus increasing the payout.  But there is agreement that the additional revenues coming is would more than offset the higher benefits to high end wage earners.  The Congressional Research Service (CRS) in 2010 concluded:
Raising or eliminating the cap on wages that are subject to taxes could reduce the long-range
deficit in the Social Security Trust Funds. For example, if the maximum taxable earnings amount
had been raised in 2005 from $90,000 to $150,000—roughly the level needed to cover 90% of all
earnings—it would have eliminated roughly 40% of the long-range shortfall in Social Security. If
all earnings were subject to the payroll tax, but the base was retained for benefit calculations, the
Social Security Trust Funds would remain solvent for the next 75 years.

Congressional Research Service, Social Security:  Raising or Eliminating the Taxable Earnings Base, September 10, 2010.

This same report also concludes, "If the earnings base were completely eliminated for both employers and employees so that all earnings were taxed, 95% of the projected financial shortfall in the Social Security program would be eliminated."  Report, p. 13. (emphasis added).

It would appear that this would have a number of benefits.  First and foremost, it would eliminate the incentive for older workers to remain in the workforce thus opening up employment opportunities for younger workers.  Second, it avoids having our children bear the burden of our unwillingness to sufficiently tax ourselves to pay for our benefits.  Make no mistake about it, raising the retirment age is the fulfillment of the oft stated warning that our children and grandchildren will have to bear the burden of our profligate spending. 

This appears to be a common sense solution, but you don't hear much discussion about it in the current deficit reductions.  Why is that?