What concerns me most is that on the small things, Congress seems able to pull together and pass legislation, but on major initiatives there are simply too many political points to be scored, and too many people will claim to be motivated by the pureness of their ideals which prevent them from supporting any form of compromise. And the things that matter right now for this country—the thing that matters—is so big, we’ll never find the collective political will to get it done.
We must reform the entitlement system. We have to, because if don’t, it will bankrupt us. And if it doesn’t bankrupt us, it will be because the few remaining workers in this country—my generation and the next one—are being taxed at 80% of their incomes to pay for them. Neither of these options is acceptable.
If the United States defaulted on its sovereign debt, it would plunge the globe into complete economic chaos. If we decide that we’re just going to pay out social security as planned to every baby boomer starting when they turn 65—and they’re all going to live into their 80s—we simply can’t come up with that money. I’m fairly certain global financial entities would prevent an actual sovereign default, but at severe cost both to the United States and to the global economic system. And who would stump up, anyway? Europe has the same pension and health care funding problems we do, and China already funds much of our sovereign debt. They may not want a default but at what point are the Chinese (and others) going to decide, okay, we’ll bail you out, but you have to do give us something in return? What would that something be? That’s what I fear.
I often think the nation-state model of global political organization is going to fall by the wayside during my lifetime—by the time I’m retiring I suspect the notion of a “distributed republic” won’t be a cyberpunk fantasy. The collapse of the U.S. government over failure to meet pension- and health care-related debt obligations would probably help push the nation-state model over the edge. I’m not sure that’s a bad thing, but for me personally and my family and friends, who live here, that’s a bit of a concern.
I just don’t know where the political will is going to come from to confront legions of social security and medicare recipients who grew up in a country that assured them they’d have a golden retirement parachute and tell them, you know what, we screwed up and we can’t pay you what we said we would. But it’s what we have to do. Social Security was supposed to be a safety net to prevent indigence among the elderly, particularly those elderly without other family who could support them. Instead it has become a guaranteed income—an income that most recipients think should be bigger, not smaller. The notion of families supporting elderly relatives has fallen entirely by the wayside, except in those cases where an ailing parent needs full-time care. Time was old folks lived with a child or other relative. Of course, people also didn’t live to the age of 85, either. But then, when Social Security was enacted, it was assumed that most people wouldn’t actually cash out of it—most workers would pass on by the age of 70, and those few who lived beyond that age would be balanced out by those who didn’t live to collect anything. The system no longer works that way, but then again, the system doesn’t work.
But this demographic time bomb has been ticking for thirty years, and the generation that stands both to benefit most from, and bankrupt the country from, the entitlement system has been in control of the levers of power since at least 1994. Not only has nothing been done to reform the system, the one time an attempt was made it was by a president who had no political capital to spend and couldn’t even get his own party to put a reform idea on the table, much less vote for one. (It’s the only thing I respect George W. Bush for, floating the idea of entitlement reform in 2005. It took guts, but he had very little to lose at that point; when he took office his popularity was already below 50% and voters were suffering buyers’ remorse.) If any one group deserves significant blame it’s the late 1990’s Clinton administration and GOP Congress, who had the best of times to work in—fat corporate profits, rising GDP and wages, the appearance of being able to accomplish major political action—and did less than nothing, didn’t even discuss the notion of entitlement reform. If we couldn’t find the will to start talking about it then, why would anyone think we’ll be able to deal with the problem in harder times?
I fear generational conflict—not so much armed conflict, though criminal conflict is possible, but a genuine political division between those benefiting from the entitlement system and those paying for it at tremendous cost to themselves. Any reform of the entitlement system is going to mean significantly less benefits for my generation and those to follow; that’s a given and one most of my generation accepts. So, since we know what the problem is, and we know we’ll have to sacrifice to fix it, the question is, will we be able to convince the baby boomers to accept any sacrifices themselves. Because if not, we’re doomed to fail. If the baby boomers won’t let us reform social security and medicare and cut their entitlements and the benefits they’ll receive, we will not solve this problem. The government may not fall—forces around the world would work to stop that—but that list of things I said I think government should be doing? Those will all fall by the wayside. Every dime spent will have to go to pensions and health care, and then, when my generation finally retires to a lower standard of living than our parents, the country will still be so mired in debt it will take at least another generation before we can start spending money on actual appropriate government activities again.
The entitlement system may not actually bankrupt the United States. But it will cause the U.S. to lose its position as the leading power in the world. I for one think we need to be fighting to keep that position, for our own good as well as the world’s; that means we have to fix our debt problem; and that means, like it or not, we have to cut middle class entitlements, cut them now, and cut them deep. And that, my friends, I don’t believe will ever happen.