The debate over Social Security and America’s mind-boggling debt is going to get more heated. We’ve seen over and over in polls that people favor cutting spending… unless that spending involves them directly. In my industry we see it with the NAR and every Rotarian Socialist program that comes down the pike. But we see it with everyday homeowners too. “Yes!” they scream with their signs and their votes, “cut spending across the board. I’ve been taxed enough!” But suggest eliminating the mortgage interest deduction and see what happens. “It’s way too important,” and “What would that do to the real estate industry?” (virtually nothing, by the way). What’s to be concluded? We are dealing with a nation of NOOMPs. (You remember NIMBYs, right?) NOOMPs are people who support spending cuts, so long as those cuts are Not Out Of My Pocket.) And I suggest there’s no greater concentration of NOOMPs than within the AARP.
Robert Samuelson wrote a good piece in Newsweek recently entitled Who Rules America? It’s The AARP. In it, he suggests “the AARP sets overall priorities (in government). Its power derives from the fear it inspires in senators, congressmen, presidents and political candidates.” He went on to say “No one wants to strip needy seniors of essential benefits. Social Security, Medicare and Medicaid provide crucial protections for millions of poorer and older households. But for many relatively healthy and economically secure Americans, these programs constitute middle-class welfare.” That last bit of analogy apparently caused such an uproar (ostensibly from middle-class Americans who don’t appreciate it when someone points out they are on welfare), that he felt obliged to write a second article entitled Social Security: A Form of Welfare to try and set the record straight. I applaud Mr. Samuelson for his frank and honest discussion, but I don’t think he goes far enough…
The Social Security system has been a welfare scheme since its inception. If it had been a situation where people paid in and then later withdrew – what we might call a retirement account – and which Congress then went in and stole from (leaving behind their ubiquitous IOUs), we could fairly blame the politicians with abandon. But that’s not the case. This was sold as a “pay as you go” system and approved by not only politicians, but by the public as well; in election after election after election. Worse yet, Congress did continually raid the funds and leave behind IOUs, creating the bankrupt situation in which we currently find ourselves. So here’s the question: do we blame the politicians who kept crooked records and stole (sorry, “borrowed”) money that wasn’t theirs in order to pay for programs people demanded, or do we blame the people demanding them?
I, for one, am tired of hearing people, especially Baby Busters –quite possibly the most economically, politically and culturally devastating generation in America’s brief history – arguing that they have some kind of contract; they paid in and they deserve their money back. Or worse: that they paid in and now current generations owe it to them to continue this Ponzi scheme of wealth redistribution. I’ve got a thought: you, as a generation, voted for the politicians that ignored the Constitution and started government on its current, bloated sense of self. The unfunded and under-funded attempts at social engineering were initiated on your watch and with your blessing. It was your call to continue a system anyone with a grade school education could have pointed out was unsustainable; a system that could only survive by increasingly taxing later generations. How about you take a big bite of humble pie, admit you were wrong, and clean up your own mess.
I haven’t seen polls to back this up, but I don’t know anyone under the age of 50 (and paying attention) who expects to receive Social Security in their lifetime. So here’s a proposal: we will happily forgo any “benefits” due us for what we’ve paid in thus far – for having supported this theft of our wealth – in return for you taking responsibility for your decisions. Maybe you can raise the retirement age, maybe you can means test the income, maybe you can cut the pay-out; but here’s the point: I don’t care what you do about it. Just stop shoveling it my way. Our current generation of politicians and voters has already given me a $1.5 trillion dollar yearly deficit to deal with and that’s more than enough. To borrow from the vernacular of your day: Start being stand-up… and stop being NOOMPs.
Dan Gobis says:
If I were your age I would feel the same way you do. The Social Security Act was enacted in 1935, BB’s (Boom or Bust) born beginning 1946. Quit whinning and deal with your future.
As my fellow boomer once said, “Excuuuuuze me!!!”
March 9, 2011 — 7:51 pm
Al Lorenz says:
Sean,
Responsibility is such a beautiful thing.
Dan, excuses aren’t what’s needed here. I’m over 50 and happily agree with Sean.
March 10, 2011 — 10:38 am
Sean Purcell says:
The Social Security Act was enacted in 1935, BB’s (Boom or Bust) born beginning 1946.
Not sure what date of inception has to do with my post; I didn’t say the Busters invented SS, only that the odd combination of their sense of superiority and entitlement, vastly increased gov’t spending and hastened the financial collapse. It was also during the Busters’ watch that citizens effectively handed critical thinking over to the government; odd result for such a counter culture beginning.
Quit whinning…(sic)
Sometimes the first step in solving a problem is clarifying exactly what the proplem is and who’s responsible. Hard to confuse that with whining.
…deal with your future.
Now that’s funny!
March 10, 2011 — 1:17 pm
Sean Purcell says:
Al, I wonder, if I could do the poll, what % of people over 50 would opt out given the chance…
March 10, 2011 — 1:29 pm
Dan Gobis says:
I stand corrected on my emotionally charged comments. I stand fast on my position, and submit this article, with credit given to the appropriate sources:Are Baby Boomers The Greediest Generation?
Nov. 12 2010 – 3:43 pm | 1,875 views | 1 recommendation | 9 comments
By JANET NOVACK
Image by popculturegeek.com via Flickr
What’s in a headline? Laurence J. Kotlikoff, a Boston University economics professor, prolific writer and occassional bomb thrower, has set off a debate on Forbes.com with a new column here Baby Boomers: The Greediest Generation. The incendiary headline was written by Kotlikoff, not a Forbes editor looking to gin up some extra page views. (I know, since I’m the editor responsible for the column.)
Sure, Kotlikoff was trying to attract attention. Why shouldn’t he try? He’s been warning since the 1980s about the dangers that entitlements (Social Security, Medicare and Medicaid) and the aging of the baby boomers together pose for the nation’s fiscal health and for future generations. His book, The Coming Generational Storm (written with Scott Burns), was published back in 2004.
In Kotlikoff’s view, the chairs of President Obama’s deficit commission, hailed and pilloried for proposing radical changes earlier this week, haven’t gone nearly far enough to attack the long term fiscal imbalance. I urge you to read Kotlikoff’s full column, but here’s a taste:
“Herb Stein, once the chairman of President Nixon’s Council of Economic Advisors, had a saying: `Things that can’t go on will stop.’ What he should have said was, `Things that can’t go on will stop too late.’ When the U.S. Treasury bond bubble bursts, we could see a financial collapse that makes 2008 look tame. If that happens, we boomers will see our retirements vaporize, together with our kids’ livelihoods.
We can’t grow our way out of this mess. Nor can we inflate or borrow or tax our way out of it. The only way out is to reduce spending. The good news is that the American people seem to realize this. In last week’s election the voters made it very clear that they want spending brought under control. The bad news is they think this can be accomplished by slashing discretionary programs. The sad truth is that there are not nearly enough `bridges to nowhere’ in the budget to close the fiscal gap. The same is true of defense spending, although we can no longer afford endless wars we can’t win. Getting overall spending under control inevitably means spending less on Medicare and Social Security. A lot less.”
A lot of the negative reaction to Kotlikoff’s column has come from boomers taking umbrage at what they consider a generational slander. (You can read all the comments here.)
For example, firered posted on 11/11/10 at 05:54 PM EST:
“This situation was neither created nor perpetuated by the `Baby Boomer’ generation. Instead, the finger prints of the so-called `greatest generation’ are all over it. Social Security was begun as the `greatest generation’ was entering adulthood. It was politicians of that same generation who added on Medicare to burden the so-called social security trust fund while profligately plundering that same fund to provide more entitlements to that generation. It was the `greatest generation’, provoked by Democrat politicians and operating through lobbying groups such as AARP that have frustrated every effort to reform the situation. So please, do not visit the sins of the father upon their children. The Social Security mess was created by the Greatest Generation and the Boomers were left holding the empty bag.”
MsFitz01 posted on 11/12/10 12:34 PM EST:
“A Greedy Generation? Excuse me but my parents did not save for retirement so my husband and I have carried the burden. We have lived in 3rd world countries and sacrificed plenty. I guess that makes us greedy. No, it helped us not to be a drain on society but we are now being told we have to do with less and not benefit from any of the massive tax dollars we paid in. Until you understand what many have been through, may I suggest you stop referring to us boomers as greedy.”
I chatted today with Kotlikoff (a boomer himself) about the reaction. “Maybe I should have added a question mark,’’ he said. “Are we going to be the greediest generation?”
Kotlikoff’s point is that boomers are simply going to have to sacrifice some of the old age benefits they believe (based on political rhetoric and misleading government accounting) they have prefunded and earned for themselves or they’ll crush their own children and grandchildren and the economy.
“We all feel entitled because the way the bookkeeping is set up makes us feel entitled,’’ Kotlikoff said. But, he added, if the boomers insist on getting theirs, “we’re going to take everybody down, including ourselves.”
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March 10, 2011 — 7:59 pm
Sean Purcell says:
Interesting article Dan, and I appreciate your posting it here. My take is somewhat in disagreement with the comments, though there is certainly enough blame to go around. My point has more to do with the NOOMP position argued today (especially by Busters) who, I believe, were instumental in vastly increasing gov’t spending and continue as we speak. The leadership we’ve had since the 90s are direct Busters; both themselves and by constituent.
To be fair though, I will go and read the full column (along with the comments) and bring back some researched facts. I look forward to continuing the conversation…
March 10, 2011 — 9:33 pm
Dan Gobis says:
The blame goes back well before the 90’s. I have been paying SS since 1969 and I remember reading and hearing, beginning 42 years ago, that my generation would be lucky to collect anything from the contributions we were making.
Everything has a shelf life, Social Security appears to be past it’s expiration date, but many expect to stretch that date to accomodate their needs.
March 11, 2011 — 8:02 pm
Teri Lussier says:
>Maybe you can raise the retirement age, maybe you can means test the income, maybe you can cut the pay-out; but here’s the point: I don’t care what you do about it. Just stop shoveling it my way.
Exactly right. The AARP is proving itself to be one of the biggest political thug-style organizations around. Lobbying, bullying, coercion, entitlement mentality, and guilt trips- they are master manipulators.
It’s dirty money.
March 17, 2011 — 2:44 pm
Eric Bramlett says:
I love the conservative nostalgia for Reagan – a guy who tripled the national debt.
March 19, 2011 — 4:23 pm
Dan Gobis says:
Coincidentally I just received my Social Security Statement. I have paid nearly $250,000 in Social Security taxes since 1968, over $50,000 towards Medicare since 1968. I am 57 years old, so far I have not collected one penny of what I have paid in, don’t expect to for another 9-13 years, either at 66 y.o. or 70 y.o. “Stop shoveling it your way”??? I am getting screwed as much as anyone.
Eric, Social Security has been in trouble since the 70’s. Ronald Reagen was a mediocre actor and even worse as a president, and similar to you, and I, he thought he was doing the right thing.
God help America.
March 19, 2011 — 5:55 pm
Sean Purcell says:
Eric, as is so often the case when one views things through a bias of left or right, you appear to have misunderstood what I said. President Reagan, and my personal ideas on what type of president he was, were never an issue. The BBs started coming into the power of elected office in the 90s; simply a matter of math.
March 19, 2011 — 6:23 pm
Sean Purcell says:
Dan, my beef is the sense of entitlement. I am truly sorry that a quarter million dollars was stolen from you on promises that were never financially realistic in the first place. I’m sorrier still that the money was then used to fund programs of the left and right through fraudulent accouting practices. My point is that the people now being “screwed” are those self same people that elected the politicians that did the screwing. You, as in individual, may have never voted for anyone but a small government libertarian, but you, as a citizen during the watch when many of these unsustainable programs were put into place, must bear the responsibility.
The shoveling I want stopped is the idea that future generations must continue this madness to make whole the generations that contributed/allowed/slept through it.
March 19, 2011 — 6:29 pm
Dan Gobis says:
Sean,
Here is another good article. The last paragraph sums up my feelings. Let me ask you this:
Do you pay your Social Security Tax? Do you vote? Entitlement? Give me my money back, I’ll take care of myself.
I was not eligible to vote until 1971. The unsustainable programs were well established and out of control by then.
From the leadership that brought us to where we are today:
During a briefing about the Iraq war Rumsfeld said, “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. There are things we do not know we don’t know.”
Blame his generation.
The article:
Social Security: A Great Moral Failure
8 February 2005 Alex Epstein
We should be debating, not how to save Social Security, but how to end it.
In his State of the Union Address, President Bush said that many options were “on the table” to deal with Social Security’s problems, and that he “will listen to anyone who has a good idea to offer.” But there is one idea he will not listen to: the idea that Social Security should be phased out and ended altogether. Why? Because like his Democrat critics, he believes that whatever Social Security’s financial problems, the program is “a great moral success.”
But is it?
Social Security is commonly portrayed as benefiting most, if not all, Americans by providing them “risk-free” financial security in old age.
This is a fraud.
Under Social Security, lower- and middle-class individuals are forced to pay a significant portion of their gross income–approximately 12%–for the alleged purpose of securing their retirement. That money is not saved or invested, but transferred directly to the program’s current beneficiaries–with the “promise” that when current taxpayers get old, the income of future taxpayers will be transferred to them. Since this scheme creates no wealth, any benefits one person receives in excess of his payments necessarily come at the expense of others.
Under Social Security, every aspect of the government’s “promise” to provide financial security is at the mercy of political whim. The government can change how much of an individual’s money it takes–it has increased the payroll tax 17 times since 1935. The government can spend his money on anything it wants–observe the long-time practice of spending any annual Social Security surplus on other entitlement programs. The government can change when (and therefore if) it chooses to pay him benefits and how much they consist of–witness the current proposals to raise the age cutoff or lower future benefits. Under Social Security, whether an individual gets twice as much from others as was taken from him, or half as much, or nothing at all, is entirely at the discretion of politicians. He cannot count on Social Security for anything–except a massive drain on his income.
If Social Security did not exist–if the individual were free to use that 12% of his income as he chose–his ability to better his future would be incomparably greater. He could save for his retirement with a diversified, long-term, productive investment in stocks or bonds. Or he could reasonably choose not to devote all 12% to retirement. He might choose to work far past the age of 65. He might choose to live more comfortably when he is young and more modestly in old age. He might choose to invest in his own productivity through additional education or starting a business.
How much, when, and in what form one should provide for retirement is highly individual–and is properly left to the individual’s free judgment and action. Social Security deprives the young of this freedom, and thus makes them less able to plan for the future, less able to provide for their retirements, less able to buy homes, less able to enjoy their most vital years, less able to invest in themselves.
And yet Social Security’s advocates continue to push it as moral. Why?
The answer lies in the program’s ideal of “universal coverage”–the idea that, as a recent New York Times editorial preached, “all old people must have the dignity of financial security”–regardless of how irresponsibly they have acted. On this premise, since some would not save adequately on their own, everyone must be forced into some sort of “guaranteed” collective plan–no matter how irrational. Observe that Social Security’s wholesale harm to those who would use their income responsibly is justified in the name of those who would not. The rational and responsible are shackled and throttled for the sake of the irrational and irresponsible.
Those who wish to devote their wealth to saving the irresponsible from the consequences of their own actions should be free to do so through private charity, but to loot the savings of untold millions of innocent, responsible, hard-working young people in the name of such a goal is a monstrous injustice.
Social Security in any form is morally irredeemable. We should be debating, not how to save Social Security, but how to end it–how to phase it out so as to best protect both the rights of those who have paid into it, and those who are forced to pay for it today. This will be a painful task. But it will make possible a world in which Americans enjoy far greater freedom to secure their own futures.–
Sean, I’ll leave it to your generation to “protect both the rights of those who have paid into it, and those who are forced to pay for it today.”
It is now your watch. Good Luck.
March 20, 2011 — 4:27 pm