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Wednesday, October 21, 2009  

I hope they all just f-f-f-fade away

My sometimes comrade, sometimes friendly rival TAE has a post up presaging a generational battle royal over spending and entitlements, a post sparked specifically by the Obama administration's dubious decision to plump for $250 one-time cash handouts to Social Security recipients, more or less in lieu of this year's deflation-obliterated cost of living adjustment. Yglesias, in a post buried by his phenomenal output, mitigated the admitted badness of this policy on two grounds: 1) it's a reasonably stimulative policy move for an economy still in dire need of stimulation; and 2) it preempts Congress's perhaps inevitable move to add a COLA anyway, which would raise the baseline of benefits in the future such that Social Security's finances would be much worse off. I tend to agree, but even if he's wrong on one or both counts, I don't really think this is the key issue for any generational fiscal warfare.

I'm of two minds on the issue of entitlement spending. Specifically, I'm of one mind on Social Security and another on Medicare. Since my wife and I are both self-employed, we pay both the employer and employee shares of the payroll taxes that fund both programs. I'm a very big supporter of Social Security, in part because I saw how it dignified the old age of so many people I've known and in part because I'm in an inherently risky profession that, given changes in the church, may not be able to provide either a reliable pension or the kind of income that allows me to save substantial amounts of money on my own. This is of course my choice, and I will work as long as I am able, but I rely heavily on the idea that as a society we will commit to providing a minimally tolerable dotage for everyone who has worked. And not coincidentally, Social Security is actually in a pretty good condition fiscally speaking. If Sandra Day O'Connor hadn't wanted to retire so soon, it would be in even better condition, as we wouldn't have had two enormous tax cuts and a hugely costly war that destroyed the federal budget and evaporated the surplus all of us working presently pay into the federal coffers. But I am very optimistic that, relatively minor reforms in taxation and benefits notwithstanding, the Social Security system that shelters today's blue-collar elderly will also shelter me.

Where I truly worry, and where I develop some generational resentment, is with Medicare, which is in terrible fiscal shape. I am currently paying into a Medicare system that will almost certainly be much less generous for me than it is for its present recipients. And even this I would not mind, because I treasure the achievements of Medicare too, but for the fact that Medicare recipients are among the most hostile to the idea of extending health care security to people my age. The president's attempt to wring some savings out of the system was met with ferocious resistance, leading to the absurd spectacle of rallies arguing at once "no socialized medicine" and "hands off my Medicare," with no apparent awareness that Medicare is socialized medicine.

Next to the specter of spiraling Medicare costs, a two-year stimulus bill and a one-time old-folks buy-off is next to nothing. If you want to see the terrible power of the old over the young, you can see it with Medicare. A great deal hinges on whether there is the will, in either party, to do something about that system. If not, TAE and I and everyone under 55 or so is paying into a system that will be ruined before we enjoy any of its very necessary benefits. That's something I'll go into the trenches over.

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posted by Benjamin Dueholm | 8:21 PM
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