Robbing The Future To Pay For Promises Of The Past

M2RB:

 

 A live wire, barely a beginner
But just watch that lady go
She's on fire, 'cause dancin' gets her higher than-uh
Anything else she knows

Ooh, baby baby
Won't-cha turn your head my way?
Ooh, baby baby
Well don't skip romance 'cause
You're old enough to

Dance the night away
Oh-oh-oh (Ah) Come on g-girl, dance the night away

 There Are No Winners In The War Against The Young

By Walter Russell Mead

That’s the reality, writes Matt Miller in the Washington Post:

You [younger Americans] are in big trouble. You don’t even know it. You’re busy trying to get a degree, land a job, start a family, save for a home. You don’t follow the news. But trust me—you’ve been taken for a ride by your elders. . . .

The job market for young people is a disaster, the toll of a burst financial and housing bubble that both parties let fester. The crisis has reached the point where years of unpaid labor (in the form of internships) have become a way of life for millions of Americans in their 20s.

Our K-12 schools have slid from the best in the world to mediocre under both Republican and Democratic presidents and governors. That’s largely because for decades we’ve embraced a bipartisan policy of recruiting middling students to become teachers.

Our roads, bridges, sewers, airports and power grids desperately need upgrades. Our investments in research and development as a share of our economy trail that of our peers. Republicans don’t seem to care. Democrats care enough to propose token sums that would fund a fraction of the need.

There’s no cash for such investments in the future because pension and health-care programs for seniors (plus a bloated Pentagon) take up so much of the budget. At the federal level, seven dollars go to programs supporting elderly consumption for every dollar invested in people under 18. Nationally (after taking account of the fact that most education is paid for at the state and local level), the ratio is still 2 ¹ / ₂ to one…

Want more? For years, states have let public pension managers assume their investments would grow 7.5 or 8 percent a year, when 3 to 6 percent has been more realistic. This bipartisan ploy hides trillions more in pension shortfalls, funds that will have to be forked over one day by (you guessed it) younger Americans.

Read the whole thing. Miller echoes arguments Via Meadia has been making for some time. The evidence is devastating, but as Miller concludes, young people haven’t woken up to the dangers, even as the policies that turn the screws on them have gone on for years.

In 1995, when I was a (younger) generational equity worrywart, I asked then-Sen. Alan Simpson how to fix what was clearly coming. Simpson told me nothing would change until someone like me could walk into his office and say, “I’m from the American Association of Young People. We have 30 million members, and we’re watching you, Simpson. You [mess with] us and we’ll take you out.”

Will the kids wake up one day soon? Will anything be done to save them from paying their elders’ bills in addition to the hefty bills for other responsibilities and desires like having a family or buying a home?

This is partly because we’ve had two generations of older people behave with extreme shortsightedness and selfishness: the Boomers and their immediate heirs have been chasing unicorns and building their self esteem while neglecting their basic duties. But as Miller acknowledges it’s also partly because the challenges we face today are unusually hard. Many of our core systems — government, education, health care — are becoming impossibly expensive and unproductive given the demands that contemporary life puts on them.

America needs an upgrade, and young people need it more than anybody else. The old ways of doing things are gradually choking the life out of the country and making it harder and harder for people to do very simple things — like starting a family, raising, kids, preparing for retirement.

Generational equity is one of the reasons America has to change the way it does business; but every generation — including those not yet born — has a stake in breaking the chains that hold us back.

The IT revolution and globalization shouldn’t be impoverishing us; they offer unparalleled opportunities to give Americans the chance to live richer, more interesting and more fulfilling lives than ever before. But it’s raining soup, and America is still standing there with a fork — a blue model fork, and it’s just not what we need.

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Sophie:

As I wrote in "'Lies' About Social Security and Medicare Pandering Politicians Never Told You," the demands that will be made on today's young to pay for promises made to seniors will grow to such an oppressive degree that it is entirely delusional for anyone to believe that it will not provoke widespread unrest and, perhaps, outright violence between generations.

It is true that the government made promises to pay Social Security and Medicare.  It is also true that when those promises were originally made demographics were on its side -- at least to a degree.  They no longer are:

Fact:  There were 159.4 workers for each Social Security recipient in 1940.

Fact:  There were 16.5 workers for each Social Security recipient in 1950.

Fact:  There were 5.1 workers for each Social Security recipient in 1960.

Fact:  There were 3.7 workers for each Social Security recipient in 1970.

Fact:  There were 3.2 workers for each Social Security recipient in 1980.

Fact:  There were 3.4 workers for each Social Security recipient in 1990.

Fact:  There were 3.4 workers for each Social Security recipient in 2000.

Fact:  There were 3.3 workers for each Social Security recipient in 2005. 

Fact:  There were only 1.75 full-time private-sector workers in the United States last year for each person receiving benefits from Social Security, according to data from the Bureau of Labor Statistics and the Social Security board of trustees.

Furthermore:

Fact:  The average senior receives in Social Security about a third of what the average worker makes.

Fact:  In 1940, the average worker had to pay only 0.2% of his salary to sustain the seniors of his time.

Fact:  In 1950, the average worker had to pay only 2% of his salary to sustain the seniors of his time.

Fact:  In 2011, the average worker has to pay 11% of his salary to sustain the seniors of his time.

Fact:  In 2131, the average worker will have to pay 17% of his salary to sustain the seniors of his time.  This is a staggering sum, considering that it is apart from all the other taxes he pays to sustain other functions of government, such as Medicare, whose costs are exploding. 

Projection: When today's college students reach retirement (about 2054), Social Security alone will require a 16.6% payroll tax, one-third greater than today's rate, according to the non-partisan Peterson-Pew Commission on Budget Reform.

Projection: When Medicare Part A is included, the payroll tax burden will rise to 25.7% - more than one of every four dollars workers will earn that year.

Projection: If Medicare Part B (physician services) and Part D are included, the total Social Security/Medicare burden will climb to 37% of payroll by 2054 - one in three dollars of taxable payroll, and twice the size of today's payroll tax burden, according to the non-partisan Peterson-Pew Commission on Budget Reform. 

Projection: More than one-third of the wages workers earn in 2054 will need to be committed to pay benefits promised under current law. That is before any bridges or highways are built and before any teachers' or police officers' salaries are paid. 

Projection: By 2030, about the midpoint of the baby boomer retirement years, the Medicare will require nearly half of all income tax dollars, according to the non-partisan Peterson-Pew Commission on Budget Reform. 

Projection: By 2060, Social Security and Medicare will require nearly three out of four income tax dollars. 

No one is arguing that the Greatest Generation didn't earn their due, but they were able to come home and start families, work to buy homes, and have decent lives.  Compare the life following the war to that what we would demand of American workers in the future:  A full 37% payroll tax to pay for the promises made by long-dead politicians in a completely different economic and geo-political environment.   The amount of money necessary to fulfill the promises made yesterday and today would cost future workers the ability to enjoy the very lifestyle that their forebears returned to create after freeing the world from the threats of Naziism, Fascism, and Japanese Imperialism.

Dance The Night Away - Van Halen

 

Have you seen her? So fine and pretty
Fooled me with her style and ease
And I feel her from across the room
Yes, it's love in the third degree

Ooh, baby baby
Won't-cha turn your head my way?
Ooh, baby baby
Ah come on! Take a chance
You're old enough to

Dance the night away
Whoa-oh (Ah) Come on g-girl, dance the night away

A live wire, barely a beginner
But just watch that lady go
She's on fire, 'cause dancin' gets her higher than-uh
Anything else she knows

Ooh, baby baby
Won't-cha turn your head my way?
Ooh, baby baby
Well don't skip romance 'cause
You're old enough to

Dance the night away
Oh-oh-oh (Ah) Come on g-girl, dance the night away

Oh, oh-oh-oh oh yeah

Dance (oh) the night away. Hey, hey, yeah!
Dance, dance, dance the night away
Ah come on baby (Dance the night away) Hey, hey yeah!
Dance, dance, dance the night away
Uh, come on baby, baby , Dance the night away Ooh, ooh, yeah
Dance, dance, dance the night away. Ah, ha ow!