Anyone who knows history will recall how treaties with America’s Indian tribes were conveniently discarded whenever settlers or corporate profiteers needed land, water or a variety of natural resources. It came to be called the “trail of broken promises.” Nowadays, modern Americans are getting similar treatment from our leaders in Washington as collapsing Social Security and Medicare programs threaten to leave current and future generations with much less than we were promised.
The big story last week was how Social Security and Medicare would be facing insolvency in the near future because they are paying out more than they are taking in. Medicare is predicted to be insolvent by 2017, while Social Security is expected to be “depleted” by 2037, which is four years ahead of recent predictions. The cause, say the spokesmen for the Obama administration, is a higher-than-expected demand on the funds and lower-than-expected revenues because of the economic collapse.
What’s hard to figure out is why all of this is so unexpected. The demographics of the baby boom generation have been studied and known for a very long time. We know there are 78 million boomers who have already retired or will soon retire. The effect is likewise predictable. When the boomers quit working—or even cut back to part-time because of their age—they produce less tax revenue. When 78 million people are in that status, the reduction in revenue from income taxes suddenly becomes a very big and continuously growing number.
Moreover, while those same 78 million boomers quit producing revenue, they begin to consume considerably more revenue due to the increased medical needs of the aged. This, too, is no mystery and should have been totally foreseeable, especially by the “experts” whom are highly paid with tax dollars to stay on top of such issues as demographics and supply (of revenue) vs. demand. Yet, we are led to believe that somehow Congress, the White House and all the king’s men are now suddenly surprised by a demographic that has been at least half a century in the making.
What you don’t hear getting discussed much is what happened to the money that has been taken from the boomers for all those years by the federal government for our guaranteed Social Security and Medicare payments. And why aren’t they talking about it? Because what happened is that Congress, in collusion with a succession of both Democrat and Republican presidents, has pilfered those funds and spent them on completely unrelated areas—waging futile wars of aggression, feeding the bottomless maw of the military-industrial complex, funding pet pork projects in abundance (Alaska’s “Road to Nowhere” comes to mind), and basically squandering a resource that had been promised to the future.
Instead of fat and healthy Social Security and Medicare trust funds that are able to withstand the foreseeable and unforeseeable vagaries of economics, we have a file cabinet full of paper bonds backed by the “full faith and credit” of the federal government. Unfortunately, since there’s no real money or assets, the only way the federal government can honor those bonds is to—you guessed it—borrow more money, load an even greater debt on future generations, and kick up the amount of interest payments on the enormous federal debt to stratospheric levels.
Needless to say, this isn’t how the system was supposed to work. But now that they’re in this conundrum of their own making, Congress and the White House are tossing out proposals that break the promises of the past and leave the future with a bleak outlook.
Social Security Commissioner Michael Astrue, for instance, had this to say: “The sooner we get on with the task of reforming the system, the easier it will be to make the tough choices.” Really? What part of the Social Security system needs or deserves reforming? Nothing, it works just fine. Only problem is, they spent the money already, so here come the so-called “tough choices.” And what are they? Well, if you believe any number of senators, representatives or White House operatives, the only thing we can do now is to break our promises to those who have funded the system faithfully over the years. Bumping the retirement age to 67 for those born after 1960 is already on the books, but there’s talk of raising it even higher. What’s next, retire when you die?
Or how about cutting benefits? Already Social Security trustees are saying there will be no cost-of-living increases for those on Social Security in 2010 or 2011. Flat-lining checks for retirees despite increased costs for everything from medicine to everyday necessities like food and utilities doesn’t sound like that great of an idea, especially when the federal government is on an unprecedented spending spree for everything from bankrupt financial institutions to a bloated $2 billion a day military budget.
Or hey, maybe we can raise taxes on those still in the work force. How’s that sound to all you post-boomers out there? Your demographically smaller generation gets to pay higher taxes to support the larger boomer generation because the government squandered the revenue from the taxes boomers have been paying for their entire lives. Plus, you also get to pay down, somehow, the $11 trillion in national debt that, in the end, will likely climb higher when all the trillions in financial bailouts are added in. That comes to $36,801 for every man, woman and child in the U.S. and the debt load has been increasing by $3.81 billion per day since September 28, 2007! Criminal, not clever, is the word that comes to mind as these horrid options are being floated around as if the past and its promises never existed, as if loading these terrible burdens on our children and their children’s futures is acceptable.
America’s “trail of broken promises” has gone on for a century and half. Isn’t it time this particular trail came to an end?
Helena’s George Ochenski rattles the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at firstname.lastname@example.org.