The Future Of American Affluence Isn’t What It Used To Be
For the Wilson Quarterly, Robert Samuelson writes that while America will inevitably recover from the Great Recession we’re currently mired in, that recovery isn’t likely to benefit America’s younger generations as the demands of government put greater and greater burden on their wealth:
For millions of younger Americans—say, those 40 and under—living better than their parents is a pipe dream. They won’t. The threat to their hopes does not arise from an impending collapse of technological gains of the sort epitomized by the creations of Fulton, Ford, and Gates. These advances will almost certainly continue, and per capita income—the average for all Americans and a conventional indicator of living standards—will climb. Statistically, American progress will resume. The Great Recession will be a bump, not a dead end.
The trouble is that many of these gains will bypass the young. The increases that might have fattened their paychecks will be siphoned off to satisfy other groups and other needs. Today’s young workers will have to finance Social Security and Medicare for a rapidly growing cohort of older Americans. Through higher premiums for employer-provided health insurance, they will subsidize care for others. Through higher taxes and fees, they will pay to repair aging infrastructure (roads, bridges, water systems) and to support squeezed public services, from schools to police. …
Americans in their late forties, fifties, and sixties believe that the contract made with them should be kept. They want their Social Security and Medicare benefits. They are angry when what they thought were career jobs are unexpectedly terminated; corporate buyouts and firings weren’t part of the bargain. Meanwhile, their children and grandchildren are befuddled and frustrated. Their unemployment rates are high, and their wage levels—compared to those of the past—are low. Yet they feel guilty advocating trims to Social Security and Medicare, even when the transfers go from the struggling young to the comfortable old.
For the time being, there seems to be little public appetite for reform to these government programs which represent such an enormous, and frankly unfair, transfer of wealth from young to old. That may change as some younger Americans who are increasingly aware of what a bad deal Social Security and Medicare really are grow up.
Certainly we’re going to see a test of where we’re at politically given that the Presidential race now includes Rep. Paul Ryan who is one of the few national political leaders given to straight talk on these issues. Criticizing Social Security and Medicare might not be the instant political death it once was, but the Romney campaign will be putting to the test whether or not Americans have an appetite for grown-up debate about entitlement spending.Tags: entitlements, medicare, social security