There’s good reason for concern about the costs of supporting large numbers of retirees living longer, but please hold the red-faced fury. Let’s stay on the rails and stop getting so much stuff wrong about Social Security and Medicare.
When things get dull, enterprising rousers of rabble promote a war against something or other to gain attention. The war against the baby boom generation is already in full swing.
One book about the Americans born between 1946 and 1964 has “Generation of Sociopaths” in the title. And a recent piece in The Atlantic goes for their throats as “grandparents stealing from the grandchildren.” (Ouch, that serpent’s tooth.)
There’s good reason for concern about the costs of supporting large numbers of retirees living longer, but please hold the red-faced fury. Let’s stay on the rails and stop getting so much stuff wrong.
A sloppy mistake (that many who know better commit on purpose) is to throw Social Security and Medicare into the same basket. Writing for The Atlantic, Eric Schnurer, a self-described “rethinker of government,” asserts that both programs were sold on a “fiction” — the belief that all the enrollees are receiving benefits they paid for through taxes. That’s only partly true about Medicare and seriously misunderstands Social Security.
Social Security is not a savings plan. It is a kind of insurance. Payments go to the disabled and children who lose a wage-earning parent, as well as to retirees. The contributions by workers who die before they collect their own benefits mostly stay in the pot.
Social Security is a self-contained program. Very little of its funding comes from general revenues. Should the money cushion run out, payments would be automatically cut. But there are easy fixes to cancel the run-out date, currently 2034. An obvious one is to raise the maximum income level subject to Social Security taxes.
Gains in productivity could also ease the pressure. Rising productivity helps explain why 42 workers supported each retiree in 1945 and only three workers did by 2009 — but the checks kept flowing.
One of Schnurer’s more elusive condemnations goes like this: The boomers elected Ronald Reagan. America stopped looking at the future, he explains, “when the baby boom generation, enthusiastic Reagan backers, became the largest cohort in the electorate.”
There are two problems with this statement. One is it’s not true, at least not for the 1980 election, when 54 percent of boomers voted for someone other than Reagan.
There’s another problem with wherever this argument is going. The boomers’ Social Security benefits were actually cutin the Reagan years.
Until then, Social Security was strictly pay-as-you-go. Recognizing that the baby boomers would put extra pressure on the system years hence, Democrats and Republicans agreed to build up a trust fund — to in effect save for the day when the crush of retiring boomers would stress the program.
They hiked Social Security payroll taxes. Money not then going to beneficiaries went into the fund. They also raised the ages at which boomers could start collecting full benefits. Then 65, it will reach 67 for those born in 1960 or later.
These changes were necessary and proper. They were responsible. But they did represent a cutback in benefits that previous generations enjoyed.
Medicare is another story. Despite all those taxes workers put into the program and the charges paid by beneficiaries, Medicare makes heavy demands on the treasury. Medicare costs need curbing, but do note that it is already darn more efficient than private insurance.
Rather than beat up people for turning 65, let’s bring all Americans into Medicare. That would be wise health-care reform — and nice, too.
Everyone, meanwhile, be on guard as wagers of intergenerational conflict stoke anger with half-truths and selective facts. They are making common cause with those who would cut the daylights out of beloved government programs. You don’t want to go there.