June 25, 2012

Thanks To Our Lobbyists and Politicians, I Continue To Rob My Children, Grandchildren and Great-Grandchildren

In a blog post earlier this year, I suggested calling my generation "The Lucky Generation," sandwiched between "The Greatest Generation" and "The Baby Boomers." Born between 1926 and 1945, most of us were too young to fight in World War II. But we went to college, entered the workforce, and launched our careers during the Golden Age for the U.S. economy (1947-1972).

We had a much easier time getting jobs, promotions, cars, houses, and savings than earlier generations. But now, each generation following mine seems to be experiencing a harder -- not easier -- time than the one before.

Yet our government's programs and resources strongly favor us seniors. Several press reports these past few weeks reminded me just how distorted and unfair this trend has become.

Seniors Are Better Off than any Other Age Group but Still Get Most of the Government $$
Here are some facts I've seen reported:

  • In 1959, over a third of all people over 65 were poor. Today, only eight percent are poor.
  • At the federal level, for every dollar invested in youth (under 18), seven dollars go toward programs supporting the elderly. (Taking into account that most education is paid for at the local and state level, the ratio is still 2 1/2 to one.) 
  •  Overall more than 50 percent of federal benefits flow to the 13 percent of the population that is over 65,
  • The median annual income of married couples between the ages of 65 and 69 is $61,000. One quarter of those households earn more than $100,000 a year.
  • The wealth gap between households headed by someone over 65 and those headed by someone under 35 is wider than at any point since the Federal Reserve Board began keeping this data in 1989.
  • As many as 100 million Americans now live in households earning less than their parents at a similar age.
  • Comparing inflation-adjusted net worth between 1992 and 2010, households headed by someone 75 or older was $216,800 in 2010, a whopping 63 percent increase from 1992. For households headed by someone 65 to74, net worth was just a little less at $206,700, up 38 percent from 1992. In contrast, those households headed by someone 35 to 44 had a 38 percent loss in net worth between 1992 and 2010.
  • At the federal level, we have trillions in unfunded liabilities for Social Security and Medicare benefits coming due, as more and more baby boomers retire.
  • At the state level, pension fund managers have been permitted to assume their investments would grow 7.5 to 8 percent a year, when in fact 3 to 6 percent has been more realistic. This bipartisan ruse has created trillions in unfunded liabilities.
 Meanwhile, Younger Americans Are Getting The Shaft
The federal dollars flowing to seniors are regarded as the "third rail" in American politics. Leaders in both parties are afraid to reduce those benefits. But that's not the case with programs benefiting younger Americans. Some examples:
  • In 1980, a year at a public college cost about 12 percent of median family income; the maximum Pell grant covered 70 percent of that expense. Today, public colleges cost a staggering 26 percent of family income each year, and Pell grants cover at most a third.
  • Our K-12 schools have slid from best in the world to mediocre, due at least in part to a bipartisan policy of keeping entry level teachers' salaries in ranges that do not consistently attract "the best and brightest."
  • Our investment in research and development and infrastructure trails that of many other countries.
  • The job market for young people is a disaster. Millions of Americans in their 20s are taking non-career-related jobs or unpaid internships while trying to manage huge college tuition loans.
So What Can I Do About This Generational Robbery?
Very little as far as I can figure out, at least in terms of trying to change national or even local policies. Don't get me wrong. I have nothing against the current Social Security and Medicare programs and policies when it comes to low or even moderate income seniors. But I feel strongly that reasonably affluent seniors like me should see our taxes go up, or our government entitlements go down... or both. But only if the money saved was used to benefit younger Americans.

The chances of that happening in our dysfunctional political system are nil. Seniors vote in proportionately larger numbers than any other age group. And their numbers will grow as the baby-boom "pig-in-the-python" moves into its senior years.

The American Association of Retired People (AARP), the most powerful lobbying group for seniors, takes the position that when it comes to seniors, no benefit should be cut and no tax should be increased.

There is no counterpart American Association of Non-Retired People to lobby on behalf of young people.

No doubt other older Americans would, like me, be willing to forgo some of our government benefits or pay more in taxes. But there's no assurance that the politicians won't take the money saved and direct it to the Pentagon, or add it to the hefty subsidies already in place for millionaire farmers.

So I end up where I usually do when I look at the depressing big picture drawn by our political leaders. The best thing I can do is turn my attention away from the national scene and focus instead on the small piece of turf where I have some control, and do what I can to make things better there.
Sources:
"Old vs. Young" NY Times Sunday Review, June 22, 2012 http://nyti.ms/KXoaXM
"Share the Wealth" NY Times Sunday Review, June 22, 2012 http://nyti.ms/KyGWif
"Young Americans Get The Shaft" Washington Post, June 13. 2012  http://wapo.st/MvSu7l

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