As a parent and grandparent, I say to young people: Rebel! Old Americans collectively have borrowed too much, consumed too much and saved too little, and now we expect you to take care of us for the rest of our lives. We have bequeathed you a federal debt of $15 trillion and going north, overtaxed natural systems, and other emerging tsunamis with our credit card ways. In at least one old person’s opinion, young people should strike back and take control of the nation’s politics. In my civil rights worker days in the 1960s, there was a motto: “Never trust anyone over 30.” The number is flexible, but the principle applies: people will vote for and defend their own, narrow personal interests, creating rationales to dampen any feelings of guilt. I experienced rigid displays of self centeredness many times during my 16-month campaign for United States Congress in 2009-10. Getting voters’ agreement that the federal government must stop spending $1.40 for every $1.00 in revenues was usually easy. But agreement collapsed, almost always and completely, when specifics came up: voters I talked with did not want their own benefits diminished, and they did not want to pay more in taxes. It was ok to take from other folks, but not from me. So do not expect we old people to look after you. Old people’s interests are different from young people’s, and real altruism is not common in the battles between conflicting interests that is politics. You need to protect yourself.
The United States Social Security program is a good place to start. For this post, I ignore predictions of scientists (James Lovelock, James Hansen, among others) that climate changes in the next few decades will make SS seem like a small problem. That said, Social Security benefits paid will soon exceed current income, and the gap will increase as more Baby Boomers retire and become benefit takers rather than payroll tax givers. The accumulated “Social Security Trust” will be exhausted in 25 years or so, and SS’s Chief Actuary calculated in 2009 that SS had “unfunded obligations” under current law of $15.1 trillion. The system is heavily weighted to protecting retirees, who vote consistently, and there will be pressures to raise taxes on young people’s wages to preserve retirees’ benefits. Fight back. One answer: existing law mandates cost-of-living increases for SS payments; monthly benefits now go up to match declines in the dollar’s buying power. If we did away with cost-of living adjustments for retirees, the real burdens on young workers would decrease over time. The dollar amounts of SS payments would stay the same, but benefits would be more affordable because the payroll tax receipts that support SS payments (FICA) would go up along with inflation, without changing the payroll tax rate. That is already one strategy for handling the national debt; the federal government pays off debt with dollars worth less than the dollars it borrowed.
A second obvious adjustment is raising the age of eligibility for Social Security retirement benefits to 70 or more. The system was created in 1935 with 65 as the full retirement age. That made sense when American life expectancies were five or six years less than today and work was more physical. There have been some adjustments in SS law with the full-retirement-benefit age going up to 67 for people born in 1960 and later, but not enough to insure longterm solvency. For the average worker, physical demands have declined in the last 70 years as our economy has moved away from farming and other muscle occupations towards office work, and health care is better than in the 1930s. In sum, SS beneficiaries are not dying as projected, they have better health, and fewer of today’s jobs require young muscles. The system can be described as a “ponzi” scheme since it depends on current workers, younger people, paying for retired people’s benefits for however long they live. Under existing laws, there will not be enough left when my children retire, partly because we old people are taking SS benefits for too many years.
Politics remains a huge problem. Many old people get upset at talk of reducing Social Security benefits, and politicians generally flinch at taking heat from committed, single-isssue voters. To overcome old folks’ predictable self-centeredness and get better generational equity, young people will need to be aggressive, both in the court of public opinion and at the ballot box. You should, because after all you have more of the future to live. While you’re at it, please implement changes that will slow hydrocarbon consumption and otherwise do nice things for our planet.
Image composite of images by Social Security Administration [Public domain], via Wikimedia Commons and Andy F [CC-BY-SA-2.0 (www.creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
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