Getting what we deserve
By Dave Duffy
Issue #90 • November/December, 2004
One of my favorite magazines, Reason, has a recent cover that sums up my feelings about the current presidential race. It displays side-by-side photos of Kerry and Bush with the headline “The good news is one of these guys will lose, The bad news is one will win.”
I finally decided to vote for Bush because I didn’t want to comfort the enemy by changing the chief during our War on Terrorism. But I would rather have punished Bush by voting against him, primarily because of his Patriot Act with its warrantless searches and his spending of the public treasury like there is no tomorrow. I can halfway forgive the Patriot Act by assuming it’s a temporary war time measure, but I can’t forgive his profligate spending because that steals away the future of my children.
Let me explain. Bush has already increased domestic spending by 25%, compared to Clinton’s 10% for all eight years of his presidency. His biggest domestic spending spree came in the form of a $530 billion Medicare bill to give seniors prescription drugs. Nice sentiment, I guess, but Medicare and Social Security are already headed for bankruptcy, as almost every economist who is not on a political payroll will tell you. His spending sprees, which more often than not were intended to blunt Democrats’ political attacks that he wasn’t “doing enough” for voters, coupled with the costs of fighting the War on Terror, have turned a projected 10-year budget surplus of $5.6 trillion when he took office to a current projected 10-year budget deficit of at least $2 trillion. That’s one hell of a switch.
Out-of-control spending by Bush has not only further crippled already critically ill programs like Social Security and Medicare, but it leaves our children with a projected debt that will amount to approximately $90,000 per household by the year 2014. People like me are looking to leave something for our children, not saddle them with debt.
Of course we all know Bush didn’t bring about this staggering fiscal calamity for our children all by himself. The Democrats, judging from their election year rhetoric, want to spend even more than Bush. In fact, it is remarkable in this presidential election that neither candidate talks about the imminent insolvency of programs like Social Security and Medicare, because the candidates know that to talk about the “third rail of American politics” is tantamount to committing political suicide. Which leads to the obvious conclusion that it is we, the voting public, who for years have been encouraging both political parties to spend without regard for tomorrow, who is ultimately to blame for this financial crisis.
Well, surprise to us all, the bill for these decades of spending is going to come due sooner than many of us thought. Try about five years from now when the 77 million post World War II baby boomers begin to retire. So my generation (I was born in 1944, two years before the beginning of the baby boom bubble) will get to join in this big payback after all. And it’s going to be painful.
Here’s the way I see things playing out. The first few years Social Security and Medicare benefits will be paid to baby boomers as planned, but the government will begin raising payroll taxes to take the strain off the system. In a few short years Democrats and Republicans will begin screaming at each other that they are to blame for the obvious shortfall in funds to pay for the retirement systems. There will be calls to cut benefits while raising payroll taxes even more. Elections will be won or lost strictly over who has a better fix for Social Security and Medicare, and the voting public will have to pay attention because it will be they who are paying taxes or getting benefits.
By 2020 payroll taxes will have to rise by 50% to pay for Social Security and Medicare benefits, and by 2040 they will have to rise by more than 200%. The taxpayers won’t wait for the 2040 increases, but will revolt, either joining an underground economy or forcing legislators to repeal the Social Security cost-of-living escalator and cutting benefits. Even many retired folks will realize that the taxpayers are right, that this new generation should not have to bear the burden of a problem essentially created by the retirees themselves years before they retired.
Something will have to give. If there is a recession, all hell will break loose and the Social Security and Medicare crisis will be on us all at once. There will be general financial chaos with politicians pointing the finger at anyone they can. The retirees will be caught in the middle of a financial catastrophe of their own doing.
And then the magic bullet will appear. People will remember the Carter years when inflation ran to 21%, and crafty politicians will crank up the government printing presses and fuel inflation to those levels again. With the Social Security cost-of-living escalator repealed, government will dole out smaller and smaller benefit increases and let inflation do its magic. It will take 20 plus years for the baby boom bubble to pass through the system, and many of them will be half starving with little relief for their medical problems. But they will pass through finally and become a footnote in history on how not to run a government retirement program.
And so justice will be served. One of the generations (mine) who helped create this retirement fiasco will be devastated by it. Their children won’t get a dime from the system and will have to start from scratch. Meanwhile I plan to begin collecting Social Security by age 62, two years from now, so I at least get something. The moral of this story? It’s the same moral of every story. Take care of your own future, because no one else is going to.