June 08, 2014
Actually he is not angry about how much money the government pays to Peter Peterson but if he were consistent in his logic he would be. Bruni wrote an apology from older generations to millennials, and one of the central themes is that we are supposed to feel bad about all the money that we get for Social Security and Medicare:
“The Urban Institute released a report in 2012 that looked at figures from 2008 for the combined local, state and federal spending that directly benefited Americans 65 and older versus spending that went to Americans under 19; the per capita discrepancy was $26,355 versus $11,822.”
The vast majority of the money going seniors in the Urban Institute’s calculation refers to payments for Social Security and Medicare. These are benefits that seniors paid for during their working lifetimes with designated taxes. Ignoring the fact that people paid for these benefits would be as dishonest as ignoring that the fact that a rich person like Peter Peterson could get millions of dollars a year in interest payments on government bonds because he happened to pay to buy hundreds of millions of dollars of government bonds.
Neither Bruni nor economists at the Urban Institute would ever make the mistake of talking about the interest payments to wealthy people on government bonds without noting that these people had paid to buy the bonds. Why do they forget this connection when it comes to talking about Social Security and Medicare benefits?
And these are benefits that are largely paid for. According to an analysis from the Urban Institute, the typical retiree will get slightly less back in Social Security benefits than what they paid into the program in taxes. The cost of their Medicare benefits will substantially exceed what they paid in taxes, however this is due to the fact that health care costs more than twice as much per person in the United States as the average for other wealthy countries.
This is not due to getting better care in the United States. It is due to the fact that our doctors get paid twice as much, our drug companies and medical equipment suppliers charge close to twice as much, and administrators and top management in hospitals and other health care providers get paychecks that are many times larger than their counterparts in other countries.
We may owe an apology to millennials for handing them an enormously unequal economic system, but that is not Bruni’s complaint. He wants middle class seniors to apologize for getting benefits that cost lots of money because the wealthy charge so much to provide them. As a practical matter the impact of inequality will swamp any costs that might be associated with Social Security and Medicare.
If young people get their share of the economy’s productivity growth their real wages will be close to 50 percent higher in 30 years according to the Social Security trustees projections. On the other hand, if the trend in inequality we have seen over the last three decades continues, their wages will be little changed from what they are today.
Of course Bruni does have a point when it comes to global warming, but here also the class dimension should not be ignored. The media highlighted economic hardships that could come from measures to slow global warming in ways that they never did in other contexts, such as increases in military spending. This has helped bolster the case of those who did not want to take action. So the people who own and control major news outlets like NPR and the NYT should perhaps be signing Bruni’s letter, but the bulk of the public who had little say in the matter have less cause.
(I would have Al Gore sign the letter also since the guy could not even be bothered to pay a couple of grad students to maintain a website on his movie/book.)
Note: Correction made, thanks folks.
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