December 13, 2017
Fox News and Atlantic Magazine have zero shame. The latter has a major article telling readers that Social Security is “the grandparents stealing from the grandchildren.”
The piece is a cornucopia of misstatements about Social Security and Medicare, most importantly implying that today seniors get some big windfall from the programs and that it somehow comes at the expense of our grandchildren. Both parts of this claim are seriously wrong.
In the case of Social Security, most people retiring in the near future will actually get back from the program roughly the same amount that they paid in, using standard interest rates. Low- and-moderate income people will get back somewhat more, whereas “high earners” (defined as people earning around $75,000 a year) will get back less.
The average value of Medicare benefits will exceed tax payments, but this is due to the high cost of medical care in the United States. While we don’t have better health care outcomes in the United States than in Germany, Canada, or other wealthy countries, we do pay around twice as much per person as these other countries. The difference is the greater price of drugs and medical equipment, the cost of insurance, and the pay of doctors. A serious article would look at how these big actors in the health care industry are stealing from our grandchildren, but not the Atlantic.
The other part of the story is the implication that somehow the Social Security and Medicare received by seniors is limiting our ability to ensure a decent standard of living for our children and grandchildren. This is lunatic land. As the Republicans are showing right now, we are not near any limits in our ability to run larger deficits. We could always impose higher taxes on the rich who have been the big gainers from economic growth over the last four decades, due to their rigging of the economy.
We could also reverse some of the rigging. For example, ending patent monopolies on prescription drugs and allowing them to be bought at free market prices would save us close to $370 billion a year, roughly half of which would take the form of savings to the government. Expansionary fiscal and monetary policy that allows the unemployment rate to fall to lower levels also disproportionately benefits those at the bottom of the income ladder, benefiting our children and grandchildren by giving their parents jobs and the bargaining power to get pay increases at those jobs.
The other major thieves from our children and grandchildren were the people pushing for austerity in the aftermath of the collapse of the housing bubble. This cost us trillions of dollars of lost output and has left the economy permanently poorer.
There is one other point to be made against those trying to divert attention from the class war the rich are pursuing against the rest of us. There is no plausible scenario in which our children and grandchildren won’t, on average, be richer than we are today. If many of them end up being poorer, it will be the result of inequality within generations, not the generosity of Social Security and Medicare benefits.
Anyone who doesn’t understand this basic fact has no business writing on these issues.
Note: Typos corrected, thanks Robert Salzberg and Justin Whittier.
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