Michael Gerson writes in the Washington Post The Mark of a Tired Nation, August 11, 2011.

Excerpt:

Yet the ultimate cause of the economic malaise is not a political failure but a political choice. Since the New Deal — and especially since the Great Society — America has chosen an accelerating transfer of wealth from young to old. Some of this was necessary and desirable. Many seniors face a period of economic struggle toward the end of life, which entitlements have effectively, compassionately eased.

But longer lives have extended this period of dependence, while health-care inflation has dramatically increased the cost of the Medicare entitlement. According to Andrew Biggs of the American Enterprise Institute, someone who retires today will pay for less than half of the Medicare benefits he or she is likely to receive over a lifetime — a subsidy given to even the wealthiest retirees. The balance of these costs is imposed on workers or added in debt.

The problem is that there are two periods of economic dependence in life — late and early. A healthy society not only cares for its elderly but also cultivates its children. Biggs estimates that the federal government now spends $6 on seniors for every $1 it spends on children, even though the poverty rate of children is much higher.

HKO Comments:

The small minds in the political debates look at current deficits and just the discretionary spending. The smallest minds fight a fruitless class war and refuse to acknowledge the real numbers. It is not the “Bush wars” (which the Democrats overwhelmingly supported, and which the president continues); it is not the Bush tax cuts ‘for the rich’ (which did succeed in increasing revenues, especially from the rich); and it is not because of corporate jets. These expenses may be right or wrong, but they are not the crux of the problem.

Gerson is spot on that the real problem is a choice we have made to enrich the old at the expense of the young. This kind of thinking is where the real solutions lie. The problem is not just that we are redistributing wealth, and thus often discouraging its creation; but that we are not distributing it based on need, but on perception and voting strength.

We need to grow the population to grow the economy and thus to grow our ability to provide benefits. Yet our policy is a disincentive to producing children. As the elderly live longer and health care costs grow, especially at the end of our lives, we get pushed to the point of a financial crisis where we now find ourselves.

There are lots of places to cut federal spending and we should look at all of them, but unless this fundamental problem of a humane idea taken to an inhumane extreme is addressed this economic problem will not be resolved. It is inevitable that retirement ages will be increased and that benefits will be means tested. We can whine and complain how unfair it is, but this problems has been decades in the making and those who tried to address it before faced political suicide and demagogues. Now we have no choice.

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