Young Forced To Pay For Older Generation
I'm grateful to the older folks who saved the world from total tyranny. But I've got to admit, I'm getting pretty tired of paying them back for it.Sure, our nation owes a lot to the World War II generation, the one my parents belong to. No argument here on that account. After all, this was the generation that survived the Great Depression and went on to win the greatest war of all time, leaving the globe a legacy of democracy that will last for generations.But how many times must we repay my parents' generation before the debt is settled?This question is important to people my age and younger, because if the Baby Boomers and younger generations continue to pay back our elders at the current rate, there will be nothing left in the piggy bank when we retire.And that means the old-age poverty problem that was so common before and during the Great Depression -- a condition that has been fairly well remedied by programs such as Medicare and Social Security -- could be coming back with a vengeance. It will visit the Baby Boomers and younger generations when we get old.The Baby Boom generation, the so-called "Me Generation," is supposed to be hedonistic and into instant gratification. You know, we're the generation that's so self-indulgent that hardly any of us have saved any money for retirement. What with constant drugs and sex and parties to attend, who's got the time?I'm willing to risk being placed in the doghouse by some older folks and their well heeled, well-oiled lobbyists for saying these things, because I'm bothered by constantly hearing what a bunch of reckless spenders my generation is.Sure, most of us whippersnappers don't save enough. Maybe somebody ought to start asking why.It's because we're taxed to the hilt to pay for our parent's Social Security and Medicare programs.Housing costs have risen so high that they sometimes consume up to 50 percent of our household income.The cost of education and child care is so high that a second income is needed just to pay off student loans and day care. Saving money when there's nothing left is difficult if not impossible.Older folks who sit back, look over their half glasses and say "tsk, tsk" to the Baby Boom generation for failing to plan for the future fail to remember something very basic: Their retirements were planned for and paid for by requiring future generations to subsidize their waning years.No retiree who collects Social Security or Medicare benefits paid into these systems anywhere near the amount of money they collect from them.Now that it's becoming publicly accepted that Medicare will be bankrupt by the year 2001, and Social Security by the year 2029, younger people like me are realizing that all the money we've paid into the system will be lost to us.So not only do we not save, now we've got no financial safety net for when we get old, even though we've been paying for one all our working lives. Talk about getting screwed.It's no wonder older people are warning of "generational warfare." They probably realize that as the facts of the sorry condition of Social Security and Medicare start to sink in, younger people are going to start clamoring to check out of paying any more.As the grave financial cloud of Medicare and Social Security looms over our nation and threatens serious financial crisis in every sector of the economy, both Democrat and Republican political leaders do their best to either ignore the problem or paper over it. Some dangle tax-cut proposals like candy in front of children, as if increasing the national debt is a long-term solution.Financial crisis is in the future, after all, and who ever won votes by concerning themselves with the problems of tomorrow when we've got problems today?Our Republican congresswoman, Andrea Seastrand, wants to cure the problem by cutting taxes, while her Democratic opponent, Walter Capps, says Social Security and Medicare entitlements are sacrosanct and can't be touched.Neither addresses the real issue of how to increase private savings among younger people while preventing the imminent collapse of Medicare and Social Security.Financial ruin in our old age is the great unmentionable in American politics. As Ross Perot is wont to say, the issue is like the crazy old aunt in the attic that everyone knows about but no one mentions.For example, almost every industrialized nation in the world except the United States requires employees to pay into pension programs, which are forced retirement savings accounts, or make investments.In the U.S., we don't require workers to invest their money, but we take it from their paychecks and pay it to older people, which is exactly what the FICA (Social Security) tax and the Medicare tax do. Every other country but us requires means testing to make sure retirees who don't need government subsidies don't get them.As I've already said, Medicare at the current rate of outlays will go broke by 2001, when I turn 44. By the year 2013, when I turn 56, the so-called annual surplus of Social Security tax revenues over expenses will turn negative, meaning it will run out of money, according to the Atlantic Monthly's June cover story titled, "Will America Grow Up Before It Grows Old?"The article is written by senior citizen and business executive Peter Peterson, who has taken his crusade warning of the system's collapse to "60 Minutes" and other national media. By 2030, when I turn 73, Social Security will be running an annual deficit of $766 billion, Peterson predicts.As a solution today, many politicians including Seastrand want to cut things such as Head Start, school lunches, mass transit, and other programs that help the young and the poor. Meanwhile, elderly Americans receive 11 times more federal dollars per person than children, Peterson states.Eleven times more.This is incredible, when you consider that elderly Americans have the highest level of personal household wealth of any age group, and -- counting income such as cheap medical care (Medicare) and cash subsidies (Social Security) -- they have the lowest poverty rate.We invest nothing in children and then expect them to grow up and pay us for the favor.Further, Peterson asserts, one third of Medicare benefits, two fifths of Social Security benefits, and more than two thirds of federal pension benefits go to households with incomes near the U.S. median. Given the troubling financial facts about the future of Medicare and Social Security, it's almost certain that benefits from these programs will be either severely reduced or eliminated by the time most of the Baby Boom generation retires.And that begs the question: Why are younger Americans required to pay for the retirement of older Americans when it's clear we'll never get our money back? Personally, I resent having to fulfill a so-called social "contract" with older Americans that I had no part in shaping and no hope of benefiting from.There are plenty of solutions being thrown about during this election year, but few offer any hope of a permanent remedy. So in the end, the choice is left to individual Baby Boomers and younger generations.And that choice is to start saving money now, even if it means paying for two retirements, your own and that of your parents. Perhaps then our legitimate debt for having a free world will be repaid..