December 20, 2017
The nonsense is flowing thick and heavy now that Congress has just voted to hand the bulk of a $1.5 trillion tax cut to the richest people in the country. Vox is out front getting its two cents in, telling us the big problem is the government debt built up by the baby boomers and the Social Security and Medicare that they plan to collect.The context is an interview with Bruce Gibney who is hawking a new book blaming the baby boomers for everything evil.
The confusion is thick and heavy here. For example, Gibney whines about the debt-to-GDP ratio. Fans of economics might refer him to burden of servicing the debt, which is less than 1.0 percent of GDP after subtracting the money rebated by the Federal Reserve Board to the Treasury. By comparison, it was more than 3.0 percent of GDP in the 1990s. It is also worth noting that this burden did not prevent the 1990s from being a very prosperous decade by almost any measure.
Then we get the usual complaint about Social Security and Medicare. Yeah, isn’t it outrageous how boomers think that they should be able to have an income and health care after a lifetime working? For what it is worth, boomers get a much worse return on their Social Security than the generations that preceded them, both because they paid a much higher tax rate during their working life and also because of the increase in the normal retirement age from 65 to 67.
Medicare is expensive, but that is because we pay twice as much for our doctors, drugs, and medical equipment as people in other countries. This is a big deal, but not one that has boomers as the villains.
Incredibly, in calculating debt Gibney somehow has not noticed the cost of patent and copyright monopolies that the government grants as a way of paying for innovation. In the case of prescription drugs alone, this costs around $370 billion a year, roughly equal to 40 percent of Social Security spending. (This issue is discussed in Chapter 5 of my [free] book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)
If we want to talk about harm to future generations we should also talk about the completely unnecessary austerity pushed by the deficit hawks in the years following the 2008 crash. This has cost us more than $1 trillion a year in lost output ($3,000 per person, per year).
We live in a society where the rich are running wild trying to take everything they can from the rest of us and put in their own pockets. So naturally, that increases the demand for people like Gibney who try to get people to beat up their parents and grandparents and ignore this massive heist by the rich.
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