the cato institute explains why young people should be pissed off

[Q Classic]

http://slate.msn.com/id/2092302/

When Social Security was founded, offering a federal pension at age 65, most of the people born 65 years earlier couldn't take advantage of it. They were dead. For the lucky ones who lived long enough to collect, the new pension system, founded in 1935, was meant as a modest support in the brief span before they passed on to glory. No more. Since then, life expectancy at birth in America has increased to more than 77 years. For the majority of people, that means lots of time being supported by the government. A working life is now just a tedious interregnum between two long periods of comfortable dependence.

America's elderly have never had it so good. They enjoy better health than any previous generation of old people, high incomes and ample assets, access to a host of medical treatments that not only keep them alive but let them enjoy their extra years, and a riotous multitude of ways to spoil their grandchildren. Still they are not content. From gratefully accepting a basic level of assistance back in the early decades of Social Security, America's elderly have come to expect everything their durable little hearts desire.

They often get their way, as they did recently when years of complaints finally induced Congress and the president to agree to bear much of the cost of their prescription drugs. From the tenor of the debate, you would think these medications were a terrible burden inflicted by an uncaring fate. In fact, past generations of old people didn't have to make room in their budgets for pharmaceuticals because there weren't many to buy. If you suffered from high cholesterol, chronic heartburn, or depression, you were left to primitive remedies, or none. Today, there are pills and potions for just about any complaint—except the chronic complaint that many of them are pricey. It's not enough to be blessed with medical miracles. Modern seniors also want them cheap, if not free.

That's on top of everything else they get. Retirement benefits used to be just one of the federal government's many maternal functions. But in recent years, the federal government has begun to look like an appendage of Social Security. In 2000, 35 percent of all federal spending dollars went to Social Security and Medicare. By 2040, barring an increase in total federal outlays, they'll account for more than 60 percent of the budget. And that's before you add in the prescription drug benefit. Most of the projected growth is due to rising health-care costs, not to the aging of the population, according to the Congressional Budget Office [1]. Retirees eyeing this bounty feel no pangs of guilt, thanks to their unshakable conviction that they earned every dime by sweat and toil. In fact, economists Laurence Kotlikoff and Jagadeesh Gokhale say that a typical man reaching age 65 today will get a net windfall of more than $70,000 over his remaining years. A luckless 25-year-old, by contrast, can count on paying $322,000 [2] more in payroll taxes than he will ever get back in benefits.

Why do we keep indulging the grizzled ones? The most obvious reason is that they are so tireless and well-organized in demanding alms. No politician ever lost an election because he was too generous to little old ladies. A lot of people are suckered by the image of financially strapped seniors, even though the poverty rate among those 65 and over has been lower than that for the population as a whole since 1974. But it's not just the interests of old coots that are being served here. Young and middle-aged adults tend to look kindly upon lavish federal generosity to Grandma because it means she won't be hitting them up for help. Paying taxes may be onerous, but it's nothing compared to the cost, financial and otherwise, of adding a mother-in-law suite to the house. Working-age folks also assume that whatever they bestow upon today's seniors will be likewise bestowed on them, and in the not too distant future. It's not really fair to blame the greatest generation for this extravagance. They are guilty, but they have an accomplice.

It's surely no coincidence that the new drug benefit is being enacted just as the first baby boomers are nearing retirement age. Nor can it be forgotten that the organization formerly known as the American Association of Retired People—it's now just AARP—has lately broadened its membership to include all the boomers it can get its wrinkled hands on. AARP, to the surprise of many, endorsed the plan. And what a surprise it is that the prescription drug program, which will cost some $400 billion over the next 10 years, could balloon to $2 trillion in the 10 years following that—when guess-who will be collecting. You would expect taxpayers in their peak earning years to recoil in horror from a program that will vastly increase Washington's fiscal obligations for decades to come. In fact, they—make that we—can see that the time to lock in a prosperous old age is now, before twentysomethings know what's hit them.

Boomers have gotten our way every since we arrived in this world, and the onset of gray hair, bifocals, and arthritis is not going to moderate our unswerving self-indulgence. We are the same people, after all, who forced the lowering of the drinking age when we were young, so we could drink, and forced it back up when we got older, so our kids couldn't. On top of that, we're used to the best of everything, and plenty of it. We weren't dubbed the Me Generation because we neglect our own needs, Junior. If politicians think the current geezers are greedy, they ain't seen nothin' yet.

But responsible middle-aged sorts may yet be brought to their senses when they realize that their usual impulse to get all they can will sooner or later collide with another boomer obsession: the insatiable desire to furnish our kids with every advantage known to humanity. Load Social Security with more obligations than it can bear, and our precious offspring will be squashed under the weight. To fund all the obligations of the Social Security system, payroll taxes will have to more than double by 2040—on top of whatever it costs to buy all those prescription drugs. At that point, our children will realize the trick we've pulled and start to hate our guts. That would be a cruel blow to a generation that thinks of itself as the most wonderful parents in history.

To avoid that fate, boomers need to recognize the need to stop writing checks that today's youngsters will have to cash. With the eager help of our own parents, we've created an entitlement that is fast becoming unaffordable. To bring Social Security into conformity with reality, we'll have to resign ourselves to a higher retirement age reflecting our prospective vigor and life expectancy. We'll have to accept more stringent controls on Medicare spending and take more responsibility for our own medical needs. We'll have to abandon our assumption that the point of the health-care system is to keep each of us alive forever. At some point—don't worry, not anytime soon—we will have to embrace a duty to stop functioning as a fiscal burden on our children and start serving as a nutritional resource for worms.

[1] = congressional budget office report
[2] = cato institute report

this slate report pretty much is saying things i've feared for a long while.




edit: link [2] corrected.

[Berzerker]

You're selfish

[Az]

well, duh. when do you people retire?

[Stefu]

SLAUGHTER THEM AND EAT THEIR FLESH!

[Jac de Molay]

Time to start throwing some old people out of helicopters...

[rah]

Hmmmm, I'm still 16 years from 65 and I've already paid in excess of $100,000 in SS and Medicare taxes. With any type of reasonable interest over the 20+ years, it would be worth over 250,000. Now think what that's going to be worth in 16 years, on top of the 80,000 I will have to contribute getting to 65 asuming no further increases.

Total it up and consider what I will probably get in return. I wouldn't consider that greed. I'd call it a ripoff.

[Theben]

Amazingly, the report jives perfectly with the cato institutes ideology...

[Ming]

Originally posted by rah
Hmmmm, I'm still 16 years from 65 and I've already paid in excess of $100,000 in SS and Medicare taxes. With any type of reasonable interest over the 20+ years, it would be worth over 250,000. Now think what that's going to be worth in 16 years, on top of the 80,000 I will have to contribute getting to 65 asuming no further increases.

Total it up and consider what I will probably get in return. I wouldn't consider that greed. I'd call it a ripoff.

Yes... a BIG RIPOFF!

If I had taken the money I paid into SS, and invested it... by the time I retire, I would be able to retire in luxery, and could afford my own medical costs. But no, all I'll see from the government is measily little checks that you can't really live on, and "marginal help" on medical bills... no bargin here.

[Q Classic]

of course not. which is why SS is a bad idea(tm).

to be facetious:
there's a reason why it shares the same initials as the SS.

i don't want to pay taxes on this **** at all.

[Q Classic]

You're selfish

of course i am. if i weren't, and if everyone else weren't. the capitalist system would never work.

i'd much rather take care of my own mom than trust the government to do its bang up job.

[Q Classic]

SLAUGHTER THEM AND EAT THEIR FLESH!

old people meat would be too tough and stringy, i'd wager, unless they've never really exercised, in which case they might be more like kobe beef.

[rah]

Well, despite it being a rip off, I do feel some obligation to support the workers that are now old and in need of help.

But to call it greed just because I expect the same for when I get that age. is ludicrous. And to label all the boomers (which I am one) as greedy is equally ludicrous. We HAVE paid our share, in general. We are not asking for a free hand out. Just a partial return on what we've paid.

[Q Classic]

i know you've paid your share. what irritates me is that i'll have paid my share, and then some, and will eventually be told: "hehe, go on and **** yourself, 'cause we ain't got nuttin' left."

[rah]

In all honesty, I'm expecting the same treatment.

[el freako]

Actually the baby boomers have not paid their share really.

Pay-as-you-go pension systems like the US's social security only work, long-term, if the workforce continues to expand.

As the baby boomers have not had enough children (and in doing so saved themselves the expense of rearing them) to make the system viable in the future then I would say that they bear part of the blame for it's ultimate failure (although the rise in life expectancy doesn't help)

[OzzyKP]

Originally posted by Q Cubed
of course not. which is why SS is a bad idea(tm).

to be facetious:
there's a reason why it shares the same initials as the SS.

i don't want to pay taxes on this **** at all.

We should start a campaign to link to social security with the term bad idea like the folks who linked to Bush with the term miserable failure. Drive it up in Google rankings

[rah]

Originally posted by el freako
Actually the baby boomers have not paid their share really.

Pay-as-you-go pension systems like the US's social security only work, long-term, if the workforce continues to expand.

As the baby boomers have not had enough children (and in doing so saved themselves the expense of rearing them) to make the system viable in the future then I would say that they bear part of the blame for it's ultimate failure (although the rise in life expectancy doesn't help)

That's a silly arguement. Using that type of logic, you could just as easily blame the generation prior for having too many kids, and not dieing off fast enough. It's the system itself which is to blame, not it's particpants.

I have and will continue to pay my more than my fair share.

[el freako]

Originally posted by rah

That's a silly arguement. Using that type of logic, you could just as easily blame the generation prior for having too many kids, and not dieing off fast enough

Now that's a silly argument if ever I heard one.

You might as well say that it's not your fault as a worker that the company is going bust because the standards were set by people who had higher productivity (for which read had more children) and demanded lower wages (for which read dying earlier).
You say our generation is not to blame because we behaved differently than our parents - and yet we expect the same benefit from a system that only really worked under their behaviour.

Sadly, you are typical of our generation, you complain that we should get the benefit of a system that has been broken by our changes behaviour.
Us boomers need to face up to the consequences of our actions.

[Q Classic]

We should start a campaign to link to social security with the term bad idea like the folks who linked to Bush with the term miserable failure. Drive it up in Google rankings

i like that idea. it's a good idea, as opposed to a bad idea.

[chequita guevara]

I don't suppose any of you remember what life was like for seniors before social security was instituted. Of course you don't, because with very few exceptions, no of us were alive then. At that time, the single largest group of poor people were the elderly. SS is one of the most successful programs in history in ending poverty.

What the hell is wrong with conservatives!?! If something doesn't work, you want to get rid of it. If something works, you want to get rid of it.

[chequita guevara]

Increasing the population is not necessaryto maintain the vialbity of SS. All that needs to increase is productivity.

[Q Classic]

che, maybe you're comfortable with the idea of paying 322k for absolutely nothing.

mayebe you're comfortable with the idea of letting your parents have the government take care of them.

simply put, i'm not.

i don't trust the government to teach people correctly, manage money correctly, and because of that i refuse to let them have any say in how my mother spends her retirement. social security can go **** itself for all i care, because all it is is a massive ****-the-young program.

322k is a nice house. or a nice condo. or a few nice cars. or a few great servers. or plenty of great workstations. it's ridiculous.

[Q Classic]

american productivity is higher than it ever has been in the past, and yet, the crisis merely worsens.

somehow, i don't think increasing productivity will solve everything.

somehow, i also don't think you'll be able to convince companies to pay more.

[chequita guevara]

The crisis only exists because the government has been borrowing from SS for decades without putting anything back. It's a conservative lie, like so many others.

[Q Classic]

do you honestly think anybody in congress has enough balls to put the money back?

didn't think so.

which is why the young are still ****ed.

[Kidicious]

Originally posted by el freako


Now that's a silly argument if ever I heard one.

You might as well say that it's not your fault as a worker that the company is going bust because the standards were set by people who had higher productivity (for which read had more children) and demanded lower wages (for which read dying earlier).
You say our generation is not to blame because we behaved differently than our parents - and yet we expect the same benefit from a system that only really worked under their behaviour.

Sadly, you are typical of our generation, you complain that we should get the benefit of a system that has been broken by our changes behaviour.
Us boomers need to face up to the consequences of our actions.

You make a good argument el freako. Having children was an individual cost for the boomers. But having so little was a social cost, because of the SS system. The boomers benefited from having relatively little children, and they will benefit from a system that transfers that social cost to their children.

[Japher]

All I know is that I will never see a penny of that SS money, it is only being STOLEN from me so that old people don't start roaming the streets and smelling up the place; and that's worth it.

I am investing as much as I can now so that I can enjoy my future. I am also lucky in that if I work for my company for at least 10 years I get a nice pension, on top of my 401k, and I can keep my health insurance for as long as I live (no Spider, just pay the flat monthly of whatever it is when I leave)... I like that

[el freako]

Productivity increases (for which read real wage increases as, long-term the one is pretty equal to the other) would only 'save' the pension system if the benefits were linked to prices.

As they are linked to earnings (except in my native Britian) increased productivity has zero net effect on the government-funded pensions crisis (which will also not happen in my native Britian).

[Q Classic]

to be fair, not everything wrong with the world today is the fault of baby boomers.

for one, spam isn't all their fault.

[Kidicious]

Originally posted by chegitz guevara
The crisis only exists because the government has been borrowing from SS for decades without putting anything back. It's a conservative lie, like so many others.

"Borrowing" is not really a good term. The money has been used productively instead of not used, and not benefited from.