Young people are struggling today to pay off college debts, buy a home, and raise a family. In addition, I am costing three of them more than 15 percent of their earnings just to pay for my retirement and health care benefits. We ought to be ashamed!
In the 1950’s Grandma and Grandpa stayed on the farm because they couldn’t afford to leave. Their wealth consisted of the farm and a meager Social Security check which helped pay for the groceries that they couldn’t grow. They shared that, and their wisdom, with their grandchildren.
In 1972, Wilbur Mills (D. AR.) ran for president promising a 20 percent increase in benefits for everyone on Social Security with annual cost of living increases.
Mills did not succeed in that race, but President Richard Nixon enacted Mills’ Social Security plan. Over the next several decades what was intended to be a safety net became a retirement plan. What was left unsaid was who would be paying the bill. It would be their children and grandchildren.
[sharequote align="center"]What was left unsaid was who would be paying the bill. It would be their children & grandchildren.[/sharequote]
That safety net originally had 42 people paying for each retiree. Today there are fewer than three workers paying for Grandma and Grandpa to winter in Arizona. Social Security covers over half of the living costs for most couples and 75 percent for singles.
In 1965 President Lyndon Johnson introduced Medicare to reduce the burdens on seniors from the increasing cost of health care. New innovations in medicine and life-saving technologies were extending their lives.
In 1996 Medicare cost $3 billion. The Ways and Means Committee of the U.S. House, using easily quantifiable health care consumption statistics, predicted that by 1990, Medicare would cost $12 billion. That was their conservative estimate, which took inflation into consideration. They missed their number by $97 billion. In 1990 Medicare cost $109 billion.
There is a reason for that. Nobody ever spends someone else’s money as carefully as they spend their own. Seniors began to not only enjoy better medicine, but also to abuse its availability. And they passed the costs on to their children and grandchildren.
Women knit as they attend a Senior Information & Resource Fair in South Gate, California September 10, 2013 . The event included a discussion of how the Affordable Care Act, also called 'Obamacare' will impact senior citizens and what insurance plans will be available to them. Photo Credit: AFP/Getty Images
Today, 40 percent of all Medicare dollars are spent in the last month of our lives. New technologies are partly responsible and the influx of law suits have forced doctors to employ those technologies in cases in which families might otherwise quietly opt to lose this mortal coil.
This puts a huge strain on the Medicare budget and on young people, who are paying for the increasing cost of care for seniors through increases in payroll taxes.
Now comes Obamacare. The argument for Obamacare has been twofold. First, for a variety of reasons a large number of Americans do not have health insurance. Second, the delivery of health care is unfairly expensive to those who use the most health care.
Obamacare confronts that by mandating that all policies cover a minimum array of benefits. Many of these mandated benefits are very expensive and spreading their costs over the entire population would reduce the burden on those who consume them.
It is further mandated that insurance rates will be “community rated” so that the elderly, who consume more health care than the young, will be subsidized by the young.
In this Tuesday, Oct. 22, 2013 photo, wheelchair attendants Erick Conley, left, and Sesilia Vaitele assist a pair of passengers heading to an overseas flight at Seattle-Tacoma International Airport, in SeaTac, Wash. (AP Photo/Elaine Thompson)
This is a direct transfer of wealth from the young to the old which brings me to a 2011 Pew Foundation study which shows that, in 2009, those 65 and older held 47 times the wealth of those 35 and younger. In 1984, the elderly held 10 times the wealth of those younger.
Over the 25 years of that study the median wealth of those 35 and younger declined by 68 percent while that of seniors increased by 42 percent.
Politicians crave the opportunity to provide for their constituents and too often the recipients of their concerns are those most likely to vote. What is discouraging is how often we are willing to pass costs on to our grandchildren who are, as yet, unable to defend themselves at the ballot box.
Democracies become unstable when one segment of society uses its voting power to help itself to the assets of another group. Young people seeking to make their way in the world are being abused by those of us who merely want a more comfortable life. We are reaching a tipping point. We need a decisive election to correct it.
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