Sunday, July 8, 2012

"Should All Young Americans Be Fiscal Conservatives?"

Good question:

If young Americans knew what was good for them, would they all support aggressive deficit-cutting plans that slash government spending across the board? . . .

The federal government spends more than seven times as much on someone 65 or older as it does on a child. Even after you include state and local spending on public schools, total spending per person on children is less than half that for the elderly. Over the past decade, the number of children in poverty has soared, and over the rest of this decade, spending on children will shrink by a fifth (as a percentage of total federal spending), while spending on the elderly will swell even more. On the current path, in 25 years Social Security, health-care and interest on accumulated debt would consume all Federal government revenue, according to the latest Congressional Budget Office projections. . . .

Current policies will continue to shift resources from the young to the old. Moreover, these policies are ultimately unsustainable, so that when today’s young people retire, they will not be able to count on full benefits. Without a change in policy, in 40 years Social Security will only be able to pay three-quarters of the payouts that have been promised. The gap cannot be closed by tax increases alone without sizable spending cuts.
IN THE COMMENTS: Jason (the commenter) suggests an explanation:
Money the government is spending on old people means young people are free not to take care of them.

4 comments:

Jason (the commenter) said...

Money the government is spending on old people means young people are free not to take care of them.

I think the problem is, society expanded the idea of how long childhood lasted without making an adjustment at the other end of the scale. People should be retiring just before they die, not when they still have 20 years of work in them.

AJ Lynch said...

Jason - I could agree with that but you overlook one huge factor. The feds take 12% of your pay for your entire working life and there should be sufficient funds somewhere so I can start getting a nice annuity after 45 years. The problem is they have spent that money already and there is no soc sec trust fund. It is a crime IMHO and someone should be held accountable and it should be fixed for future generations. Every long-serving Congress critter should be charged with some kind of malfeasance or theft so their succesors know better than to perpetuate a Ponzi scheme.

Simon Kenton said...

AJ - This is the reason I use my SS payouts on my kids mortgages and student loans. It needs to go back to the cohort from which it is being extorted. At least when it collapses, as all Ponzi schemes must, they will have had their part of it accrue to their net worth and their financial security.

Jason (the commenter) said...

Look at it from the perspective of the elderly:

When people depend on their own children for support, they put off retirement for as long as they can. They don't want to be a burden and they don't want to stop their children from having grandchildren. They see the consequences of their decisions, and they feel good about not retiring early.

When the government takes over elder care, old people no longer see the consequences of their decisions. And they don't get to see the full benefit of staying in the workforce for as long as possible. The "winners" are those who strip as many resources from everyone else as they can. Individually they don't harm their own children, but collectively they do.