I am a strong supporter of Social Security and have no problem with funding the system for the next 30-50 years by applying the Social Security tax to all wages and increasing the "Medicare tax" on earned income. Still, I think we need to recognize that life expectance in 1935 was less than 65 and is now approaching 80. Most jobs today do not require hard manual labor. We raised the retirement age to 67 in the 1980s and the sky did not fall. Perhaps a small increase in the retirement age for FUTURE retirees should also be considered.
We also have a huge and, perhaps, not sustainable federal budget deficit. We have millions of citizens without health insurance and the number is rising. Funding Social Security is not the only problem we need to solve.
Of course funding Social Security is not the only problem that we need to solve. That follows from the unofficial First Principle of economics—that everything depends on everything else. Although neither I nor anyone else is so brilliant as to know HOW that works in the real world, recognizing the principle is the best place to start.
I and most other Americans support the “socialist” notion that the federal government should provide a “basic” level of monetary income and other benefits (particularly, health care) to citizens beyond a certain age.
That necessarily requires the expenditure of government funds, which necessarily conflicts with the goals of financing other government programs AND limiting the federal debt.
How does this apply to the idea of (a) disbursing $1,000 to every newborn child for an “investment account” and (b) allowing their (mostly wealthy) parents to make contributions to it that are free of future taxes?
It will create an immediate increase in federal expenditures in the hope that the recipients will use it (on top of multiple existing government programs) to pay for their expenses when they retire in perhaps 68 years or so. But more importantly in terms of the impact on the federal debt, it will provide one more of several financial “instruments “ by which wealthy individuals (with the direction of their parasitic “wealth managers”) can reduce the amount of taxes that they pay over the course of their lives.
I recognize as a fact of financial economics that Social Security benefits are now being paid by a combination of receipts from the FICA tax on earned income, supplemented by general revenue to the U.S. Treasury in the form of “redeeming” the Treasury bonds in the so-called Social Security Trust Fund. By a simple act of Congress, this supplement to the Social Security system can and should be continued when the Social Security Trust Fund is depleted.
That action would allow Social Security benefits to be continued at their current level. Yes, that is a substantial expense to all American taxpayers, but no, it would not cause a sudden increase in government expenditures when the Social Security Trust Fund account became depleted.
I suspect any kind of pay-as-you-go pension fiscally unsustainable in light of rapidly advancing life-extending technologies. A fully endowed pension, like an annuity, would work, but contra Al Gore's "lockbox", SSI is not endowed.
My mother is 76 and in great health; I'm very worried about the SSI fiscal cliff of 2033 for her. I'm 52; I do not ever expect to see anything out of SSI.
Trump Accounts should be transformed into retirement accounts to get everyone max SS. That retirement income stream would also allow Medicare premiums and copays to increase and then have CSRs like Obamacare. We could tax Trump Accounts very progressively and everyone would be happy except Carleton S who is anti everything! 😉
" ...the stereotypical boomer insists that hard work and grit ...will overcome any material challenges faced by the younger generations." You make this snide remark as if the truth of the 'stereotypical boomer's' statement should be in doubt to all 'right thinking' people who, of course, are working hard and showing grit as they strive not to BUILD something, but to prove who is more of a victim of the latest trendy oppression than the other.
It’s interesting to me that you leave out the sentence following that remark as if the author made his claim with no evidence:
“Never mind that the number of jobs requiring only a high school diploma has been slashed by more than half since the heyday of the boomers, or that the income gap between mid-career and senior workers has grown by 61% as the portion of the workforce over 55 nearly doubled. A great many of the elderly today cannot and will not accept these facts. “
Why did you snidely comment on this and leave out the evidence?
I left out high school diplomas because it was meaningless pablum masquerading as data. A high school diploma is near worthless today as we graduate kids reading at fourth grade levels and doing maths around the same. A university degree is the new high school diploma. As for your second point, percentages hide truth. Is it total income across the cohort or individual income? He didn't say, so I didn't opine. But note that the older cohort likely has more money in total because it has more people in it.
And I hope you'll forgive me if you perecieived snideness in my post. It was unintentional.
But this is the exact complaint from younger generations. High school diplomas require no debt but college degrees do. That was not the decision made by millenials or Gen Xers. It was encouraged from a young age to attend college and the degree did not matter. I can remember this from my youth in the 1990s, which was not what my parents experienced. I agree that high school diplomas do not carry the weight they used to carry and standards slipped. This has been a worsening trend since 2012 when PISA scores peaked in the US. But remember it was Bush, a boomer, who signed the No Child Left Behind Act.
As for the older cohort having more money because it has more people--this is also false. Millenials are the largest generation right now, outnumbering boomers by almost 10 million. Boomers though have played the game longer, allowing them to accumulate assets over more years than millenials have. However, millenials point out that the opportunities boomers had are no longer there. I do believe my generation is prone to whining but there are some uncomfortable facts that boomers have to accept:
1. Median home sale prices are currently $403k vs. a HH median income of $83.7k, reflecting a 4.8x sales price to income ratio. Rates are about 6.5%, which is what 2002 levels were. In 2002, the home sales price to household income ratio was 2.7x. To get back to 2002 levels, home prices need to fall 44%.
2. Boomers faced high interest rates in the 1980s but benefited from a huge secular tailwind on falling interest rates
3. The cost of college was much, much cheaper for boomers than millenials
4. Childcare expenses have outpaced inflation. Best example is the dependent care deduction, which was passed in 1986. This was not pegged to inflation and is still $5000. Had this kept up with general inflation, it would be around $17k. Had it kept up with healthcare or childcare inflation, it would be around $31k. Boomers had a much more generous tax code than millenials did.
Everyone has challenges and boomers certainly did. However, there are huge changes we need to make to improve public finances. Boomers have to be a part of that solution and understand how the world has changed since they were parents. Boomers can rage that they were promised by the system to have certain benefits, but that system is headed to insolvency. Boomers are asking millenials and Gen Xers to fall on their sword and pay little to no price themselves. I am not voting for that.
Everything was going great until 2001…and Bush policies prior to 9/11 weren’t that irresponsible as the 2003 was the extremely irresponsible tax cut and not 2001.
True but he had the presidency for 8 months before 9/11? I can’t give him much credit for 8 months. His instincts were right to reform SS in 2005 but that was sunk by Dems. Had he pulled that off, he would have enjoyed a pretty good revision of his image.
SS privatization was the dumbest policy ever!! Gore had the correct reform package and Trump is following Gore’s lead. Man, Republicans are awful not because of Trump but because of Bush!! Trump is actually a mediocre president while Bush stole the 2000 election and proceeded to be the worst president in history!!
The obsession of this age is "identity". Everyone must be shuffled into groups and then grievances between groups are invented to the advantage of exploiters, grifters and degenerates. Somehow the answer is always for one group to steal from another group.
There seems little doubt that the US is an oligarchy. That is the norm for democracies, republics and just about every political entity.
In the US that oligarchy is largely a feature of corporatism not generation. It has nothing to do with boomers or blacks or jews or any of the invented letter generational groupings.
I inherited modest sums from my Parents and hope to pass on that inheritance and more to my children.
History hands every generation it's own challenges. The signature trend I've witnessed in my life are the decline of Christian faith in successive generations and the rise of nihilism inspired by scientism.
The central dogma of this age is that there is only matter and energy and we are sacks of meat. Doctrinaire adherents to the religion of this age are even inclined to deny consciousness since it can be neither be defined nor explained as emerging from matter.
Everything else is noise and justification for crime.
Hello. I'm old and i don't want to deny any benefits i had to the young. For example, i had the benefit of a 91% tax rate on the rich. That left the government a lot of money to help everyone else. Even after JFK slashed the top rate to 70% we were still able to have Medicare. Even Eisenhower and Nixon supported many social programs. Since Reagan/Thatcher it's gone the other way. Stop spending on wars and make the rich pay their fair share and the problem would be greatly reduced. It's nor the old that's the problem, it's the new division of the money.
Individual income taxes in the 1960's averaged 7.2% of GDP. In the 90's, they averaged 8% of GDP (dot-dom boom mostly) then dropped in the tech implosion. By the mid 2000's it was in the high 7's, then tanked in the 2008 recession. By the middle of Obama we were back to 8%, and for the last 10 years individual taxaes have averaged about 8.5% of GDP.
That's the OMB. It's good data. Look at table 2.3.
Overall American revenue as % of GDP has fluctuated between 15% and 20% since 1950. It dropped into the high 14's only twice over that time. Spending has been far less consistent. We kept spending in the same 15-20% range until Reagan. He spiked it to win the Cold War, but we never brought it back down. Spending remains at about 25% of GDP today, hence our massive deficit.
The narrative you're peddling just isn't true. High marginal rates did not produce some huge income tax boom in 50's or 60's. The data to prove that is readily available.
“Tech implosion”…very funny! Like Amazon and Google and Facebook and Apple never happened. No, what happened was the Bush Tax Cuts were extremely irresponsible because we actually ran a surplus in 2001 during a recession!! The lies you people tell yourselves to shirk responsibility for Bush never ceases to amaze me!!
I lived in Silicon Valley at the time, man. Believe me, the dot-com bust of 2001 was a "tech implosion".
I'm sorry to dump this much inline, but I hate arguing about things for whcih the data is readily available. Individual income tax as a percent of GDP:
1993 7.5%
1994 7.6%
1995 7.8%
1996 8.3%
1997 8.7%
1998 9.3%
1999 9.3%
2000 9.9%
2001 9.4%
2002 7.9%
2003 7.0%
2004 6.7%
2005 7.2%
2006 7.7%
2007 8.1%
2008 7.7%
2009 6.3%
2010 6.0%
2011 7.1%
2012 7.0%
2013 7.9%
The period of 1998-2001 is a severe outlier; there is no other 3 year period since 1950 where tax revenue exceeded 9% of GDP.
Bush tax cuts were passed in 2001 and 2003. disentangling the dot-com crash from the former (2001 cuts) is impossible. The latter did likely cause the half-point drop in 2003, but by 2005 it's recovered completely. (Whichi, incidently, is exactly what the supply siders said would happen.) If Bush is to blame for revenue drop in his term though, are you also willing to blame Obama for the drop in 2010-2012?
The big picture from looking at all 75+ years of data is that presidential ambition and Congressional actions appear to have only minor effects on tax revenue. That sounds weird, but that's the pattern you see.
BTW: Tax % of GDP has been above 8% for all of Donald Trump's years in office.
Listing rev / % GDP corrects for exactly what you're talking about. However, if you really want raw numbers (total IRS revenue):
2001 $1.782T
2002 $1.853T
2003 $1.952T
2004 $2.018T
2005 $2.154T
2006 $2.407T
You're right: we ran a surplus in 2001. And revenue went up every year thereafter. Bush's tax cuts did not significantly diminish tax revenue. So why didn't we have a surplus in 2005? Because we spent even more.
The story of post WWII tax revenue is one of amazing stability regardless of which party was in charge. Changes in marginal tax rates, recessions, huge policy swings... it did change revenue, but only within a very narrow range. What does change over that time is spending, particularly after 1980 -- thanks Ronnie.
Nathan started this by saying that high marginal tax rates produced a windfall for the govt, and dropping them caused a withering of the programs he thinks are important. This is patently and obviously false.
It's not about which party you like. It's not about Bush or Biden or Trump. It's about the truth. I have no problem saying that Bush spent like a drunken sailor. I do have a problem with someone who says 90% tax rates are the key to good government.
Give me a break. When Reagan left office on 1/20/89, the federal debt was $2.7 Trillion, with annual budget receipts of about $900 Billion. When Bill Clinton left office on 1/20/01, federal debt was $5.7 Trillion, a doubling of the national debt in his 8 years, and both receipts and spend were about $2 Trillion a year. George W. Bush left office on 1/20/09, eight years later, federal debt was $10.7 Trillion, an increase of $5 Trillion over 8 years, another doubling of our national debt, where federal spending increased to $3 Trillion while revenues only increased to $2.5 Trillion.
Since then, over the past 17 years, our national debt has ballooned to $39+ Trillion, a quadrupling of our national debt, where federal spending is now $7+ Trillion and revenues are "only" $5.25 Trillion.
lol, you saw the 2000 numbers and conveniently left them out!! You are flailing! 😝
Edit: my data says 2001 revenue was $2 trillion…I’m not sure what you are trying to pull?? Btw, look at revenue every year and it almost always goes up outside of a recession and then usually it’s only a year with lower revenue than the a previous year…having revenue lower than 2001 for several years is an anomaly because the tax cuts were so massive.
Nice try. Let's try this. What if the hundreds of billions spent on the ICE, the idiotic Iran debacle, etc. were spent on social programs? Would that make a difference? Let's try again. What if trillionaire Musk paid 91% tax and it was spent on social programs, in healthcare, education, housing, etc, would that make a difference?
Let's say Musk makes realized capital gains income of $50B a year. (That would be a 5% return, which is reasonable.) If you were to commandeer 90% of that, you would have $45B to spend. It's a lot of money to you and me, but the US budget is about $3500B.
Note, I do not really accept the libertarian premise that taxing billionaires at 90% would erode investment. Musk does not appear to be motivated by money. He's on a mission to preserve humanity by making us a multiplanetary species. So I don't think taxing his income at punitively high levels would affect his investment decisions all that much. (Other than giving him less to invest, and considering Musk's business track record, that's a significant drawback. Unless you think govt bureaucrats will be even better at investment than he is, which there's no evidence of anywhere in the world.)
You're changing your argument. "We used to have a 91% tax rate and that gave the government plenty of money to do stuff." Your claim was that we have a revenue problem, specifically that individual income tax revenue has declined. Data does not support that. In fact, the data says exactly the opposite.
Our deficit is not caused by a decline in revenue but by an increase in spending. Could we make up for it with more taxes? On paper, sure. In reality, the stability of the tax burden over 80 years makes me suspect that 15-20% of GDP range is pretty hard to break out of (for Americans).
I've been away from this argument for a day. What a relief to not be on the net!
But to resume, Musk is just an example. The 91% would apply to all billionaires. That would supply some more revenue i'd say. You've got the statistics to back me up with that so please supply.
As for spending my issue is what the money is spent on. More unnecessary wars that expose to the world how weak we are? More money for the ICE gestapo so Trump can try to imprison anyone who shows him up as foolish and a "loser." (and what kind of person needs to constantly prove his worth by aggression and lying - thank you Papa Trump for creating this deeply confused and rageful man, continually harming the U.S. and the world through his poorly restrained impulses). And this is not to even begin to deal with the duopoloy of graft in the Congress and in the Robber's Court.
Do you think there might be some money left over to improve the projected but neglected Social Security shortfall, that we might have a medical system that doesn't deny care to many if not most or bankrupts them if they can apply?
i went to a free public college. It was run by educators, not CEO's. Could we have that again for all the lifelong indebted that we are now producing.
Etc. Etc. Etc. for every issue that most of our 350 million citizens need and are not getting.
I have no problem with ICE deporting illegals, but you'll get no arguments from me on wars. I elected a guy who campaigned on "no more foreign wars."
The problem with "tax the rich" is that there just aren't enough really rich people. There are less than 1000 billionaires in America. Tax their realized capital gains at about 50% (remember, they pay state taxes too, so any higher risks significantly altering their behavior -- thanks Arthur Laffer) and you will still only net a few hundred billion $$$ a year. And that assumes they don't relocate their investments, which many would.
The only solution is broad but relatively small marginal rate increases (3-5%) that hit everyone: rich, middle, and lower class (the bottom 50% currently pay nothing) coupled with relatively deep spending cuts. That means chopping the military and tackling entitlements. Republicans that insist spending cuts alone will do it (or my favorite: "waste, fraud, and abuse") are smoking something. Democrats who insist taxing the rich will do it are also smoking something.
As Gene mentioned below: Clinton & Gingrich balanced the budget. (They had help from the dot-com boom, but they really did cut spending.) Was late-90's America a living hell where children starved and poor grandmas ate dog food and millions went without a place to live? I certainly don't remember it that way. I was in state college then, and it was about 1/3 the price of the one I'm sending my daughter too this fall.
We might quibble on some of Trump's policies, but I suspect you and I are more in agreement than it first appeared.
No, Clinton achieved a surplus by jacking up tax revenue while slashing defense spending…in 2000 Bush literally ran on slashing taxes and jacking up defense spending!! And thanks to over 80% approval after 9/11 Bush accomplished that. Wow, you are really bad at this! 😉
HW Bush Year 1: 20.2% (yes, Reagan cut spending as a % of GDP)
Clinton year 1: 20.5%
Bush Year 1: 17.6% (yes, Clinton also cut spending)
Bush year 7: 18.9% (too bad he didn't continue the pattern)
Obama Year 5: 20.5% (2008 recession spiked the numbers for 4 years)
Trump Year 1: 20.3%
Trump Year 7: 20.6%
Biden Year 3: 22% (COVID spiked the prior 4 years)
Trump Current: 22.8%
Revenue and spending have fluctuated within a fairly narrow range for a many decades. The problem is that both parties have chosen to spend more than we take in (on different things, yes) for the last 30 years particularly.
I agree with you that Clinton deserves great commendation for being the only President to preside over actual reductions in spending amounts in the last 50 years. He also had a spending-adverse GOP Congress for most of his term, which helped him reign it in.
Out of curiosity, I had Claude highlight on that chart when there was divided govt: https://claude.ai/public/artifacts/517750f6-934f-4ff3-ac3d-d7312c1a6b1e In every case prior to Trump, unified govt resulted in higher spending at the end of the period than the beginning. Divided governments tended to keep spending flat (except Clinton, who lowered it.)
I think I’ve had those discussion with you before…you are invested in multiple false narratives and you are lying to perpetuate the false narratives. You are most likely a sociopath and I am blocking you so that I don’t waste any more time presenting you with easily accessible facts.
Politics aside, the corporate advertising world and every health and fitness industry, be it corporate or just some self proclaimed guru, are all trying to sell you an extension on your time here in this world, where nothing lives forever. Promoting life extension beyond healthy habits is an economy that plays to a buyer’s fear and a seller’s greed…or is it just the lust for more by both parties?
It’s interesting that there seems to be a misapprehension that a sympathetic judge could just abolish the Senate and Electoral College because it obstructs the authors mere opinion that they should. The Baker decision was bad enough as it is.
An interesting piece. I have not read the book so cannot testify one way or the other about the reliability of the portrayal by this exposé. I do note that alleged number of illegal immigrants is not 50 million it is more like 11 to 14 million according to my sources.
And amazingly, it has remained at around 11 million for decades even though millions more keep crossing the border. Truly a wonder of nature.
Note that he didn’t say “illegal immigrants”, he said “people who should not be here”, iirc. That would include not only illegals but also, be could argue, people with TPS, “asylum seekers,” people on most work visas, people entering in family reunification aka chain migration, etc. In a nation with a housing shortage and other such problems, only people who have a right to be here or who offer a strong benefit to society should be here.
I am a boomer. I think the most significant financial fact of my life is that I worked during the period in which women entered the workforce in large numbers. Since house prices are basically auctions, this raised the price from something requiring one income to something requiring two. This caused home prices to rise a lot, which was great if you already owned one (me) and not so great if you did not (most young people). So women's incomes were mostly flushed away in increased mortgage interest (and paying other people to look after their kids if they bothered to have children, which increasingly they do not).
Social Security is not welfare. It was paid for by a lifetime of payroll taxes. Every cohort born after 1938 will put more in than they take out. This includes 100% of Boomers, Xers, Millennials, Zoomers and Alphas. It also includes a substantial portion of the remaining Silents. None of these people are responsible for the Ponzi nature of the funding mechanism established by Congress who were member of some unnamed older generation. It was not even FDR's fault as he was adamant it should not be welfare and wanted something like individual accounts. Congress overrode his veto.
Boomer demographic power used to elect young men, like Bill Clinton. Then it elected middle aged men, like George W. Bush. Now it elects old men, like Donald Trump.
All three men are the same age.
Gen-X is relatively small. Gen-X Dems in particular were wiped out by the Tea Party and subsequent redistricting when the older party leadership threw them to the wolves.
Millennials are larger than the Boomers now, but seem to have been raised with a kind of learned helplessness and hopelessness that limits their ability to change things.
Boomers elected Clinton and Bush, but they did not elect Trump. He IS a Boomer, but Gen X (my generation) elected him.
I agree about the Millennials; they're useless, maybe worse. And they're going to live forever courtesy old-age technology. I think Rod Dreher's view is accurate: Gen Alpha will either save Western Civilization or sink it for good.
Interesting. I suspect younger Boomers and older Gen-X are more like each other than different members of their own generation. People who were born in the 1960s are the "Reagan kids".
The largest age cohort is near the end of the Baby Boom, then it drops rapidly through the 1960s until the early 1980s.
I am late Gen-X: Too young to remember the moon landing. Old enough to remember Challenger. I remember Reagan being President, but not much about him being President. Communism fell right after we first learned about it in social studies class.
The problem with Millennials is that the best and the brightest of that generation suffer from "Straight-A student syndrome". They were rewarded for box checking, rule following, and getting the "right" answer. They were told that doing all these things would lead to unlimited success and are having a major crisis at middle age because they don't.
Even right wing Millennials, like Stephen Miller and J.D. Vance, are just parroting the ideas of older right wingers. (And worse, taking them seriously. Rush Limbaugh saw himself as an entertainer.) Stephen Miller is the product of the fever swamps of the Southern California right of the 1990s, while J.D. will wear any ideology that he thinks will get him ahead.
You and I are the same age man: we missed Neil Armstrong but we remember Christa McAuliffe. And I suspect you're right that the hard and rather arbitrary lines we draw between generations are much blurrier in reality.
Have none of you people met (the majority) of “Boomers” who are NOT upper middle class?
Adults aged 50 and older are the fastest-growing segment of the homeless population in the United States, not to mention that 60% of American Seniors (THE MAJORITY) live on $2000 a month OR LESS.
A great review! I'm always amused by plans to remake the Senate into...another House of Representatives. No, folks, there were TWO houses designed - one proportional/representative and one meant to preserve the voting presence of less populated states. If you don't like the Senate, change the Constitution (which also by design is very hard to do).
And re: solving America's old-age problem, yes, curtailing illegal immigration is a great first step. THEN, we ask every 45-year-old citizen remaining, "Hey! Do you want to spend the last half-decade of your life rotting away in a dirty diaper in a nursing home?" I'm guessing the answer will be a 100% resounding NO!!! Until we have a national conversation about our inherent right to end life on our own terms (no ministers OR DOCTORS allowed!), then the cost of aging will continue to skyrocket and our deficit problems will not get solved. Thank you for this post!
Meh. Older people vote more than younger people. There’s your trouble.
The Boomers have been fighting "The Man" for so long they failed to notice when they became "The Man".
Carleton S
I am a strong supporter of Social Security and have no problem with funding the system for the next 30-50 years by applying the Social Security tax to all wages and increasing the "Medicare tax" on earned income. Still, I think we need to recognize that life expectance in 1935 was less than 65 and is now approaching 80. Most jobs today do not require hard manual labor. We raised the retirement age to 67 in the 1980s and the sky did not fall. Perhaps a small increase in the retirement age for FUTURE retirees should also be considered.
We also have a huge and, perhaps, not sustainable federal budget deficit. We have millions of citizens without health insurance and the number is rising. Funding Social Security is not the only problem we need to solve.
Of course funding Social Security is not the only problem that we need to solve. That follows from the unofficial First Principle of economics—that everything depends on everything else. Although neither I nor anyone else is so brilliant as to know HOW that works in the real world, recognizing the principle is the best place to start.
I and most other Americans support the “socialist” notion that the federal government should provide a “basic” level of monetary income and other benefits (particularly, health care) to citizens beyond a certain age.
That necessarily requires the expenditure of government funds, which necessarily conflicts with the goals of financing other government programs AND limiting the federal debt.
How does this apply to the idea of (a) disbursing $1,000 to every newborn child for an “investment account” and (b) allowing their (mostly wealthy) parents to make contributions to it that are free of future taxes?
It will create an immediate increase in federal expenditures in the hope that the recipients will use it (on top of multiple existing government programs) to pay for their expenses when they retire in perhaps 68 years or so. But more importantly in terms of the impact on the federal debt, it will provide one more of several financial “instruments “ by which wealthy individuals (with the direction of their parasitic “wealth managers”) can reduce the amount of taxes that they pay over the course of their lives.
I recognize as a fact of financial economics that Social Security benefits are now being paid by a combination of receipts from the FICA tax on earned income, supplemented by general revenue to the U.S. Treasury in the form of “redeeming” the Treasury bonds in the so-called Social Security Trust Fund. By a simple act of Congress, this supplement to the Social Security system can and should be continued when the Social Security Trust Fund is depleted.
That action would allow Social Security benefits to be continued at their current level. Yes, that is a substantial expense to all American taxpayers, but no, it would not cause a sudden increase in government expenditures when the Social Security Trust Fund account became depleted.
I suspect any kind of pay-as-you-go pension fiscally unsustainable in light of rapidly advancing life-extending technologies. A fully endowed pension, like an annuity, would work, but contra Al Gore's "lockbox", SSI is not endowed.
My mother is 76 and in great health; I'm very worried about the SSI fiscal cliff of 2033 for her. I'm 52; I do not ever expect to see anything out of SSI.
Trump Accounts should be transformed into retirement accounts to get everyone max SS. That retirement income stream would also allow Medicare premiums and copays to increase and then have CSRs like Obamacare. We could tax Trump Accounts very progressively and everyone would be happy except Carleton S who is anti everything! 😉
" ...the stereotypical boomer insists that hard work and grit ...will overcome any material challenges faced by the younger generations." You make this snide remark as if the truth of the 'stereotypical boomer's' statement should be in doubt to all 'right thinking' people who, of course, are working hard and showing grit as they strive not to BUILD something, but to prove who is more of a victim of the latest trendy oppression than the other.
It’s interesting to me that you leave out the sentence following that remark as if the author made his claim with no evidence:
“Never mind that the number of jobs requiring only a high school diploma has been slashed by more than half since the heyday of the boomers, or that the income gap between mid-career and senior workers has grown by 61% as the portion of the workforce over 55 nearly doubled. A great many of the elderly today cannot and will not accept these facts. “
Why did you snidely comment on this and leave out the evidence?
I left out high school diplomas because it was meaningless pablum masquerading as data. A high school diploma is near worthless today as we graduate kids reading at fourth grade levels and doing maths around the same. A university degree is the new high school diploma. As for your second point, percentages hide truth. Is it total income across the cohort or individual income? He didn't say, so I didn't opine. But note that the older cohort likely has more money in total because it has more people in it.
And I hope you'll forgive me if you perecieived snideness in my post. It was unintentional.
But this is the exact complaint from younger generations. High school diplomas require no debt but college degrees do. That was not the decision made by millenials or Gen Xers. It was encouraged from a young age to attend college and the degree did not matter. I can remember this from my youth in the 1990s, which was not what my parents experienced. I agree that high school diplomas do not carry the weight they used to carry and standards slipped. This has been a worsening trend since 2012 when PISA scores peaked in the US. But remember it was Bush, a boomer, who signed the No Child Left Behind Act.
As for the older cohort having more money because it has more people--this is also false. Millenials are the largest generation right now, outnumbering boomers by almost 10 million. Boomers though have played the game longer, allowing them to accumulate assets over more years than millenials have. However, millenials point out that the opportunities boomers had are no longer there. I do believe my generation is prone to whining but there are some uncomfortable facts that boomers have to accept:
1. Median home sale prices are currently $403k vs. a HH median income of $83.7k, reflecting a 4.8x sales price to income ratio. Rates are about 6.5%, which is what 2002 levels were. In 2002, the home sales price to household income ratio was 2.7x. To get back to 2002 levels, home prices need to fall 44%.
2. Boomers faced high interest rates in the 1980s but benefited from a huge secular tailwind on falling interest rates
3. The cost of college was much, much cheaper for boomers than millenials
4. Childcare expenses have outpaced inflation. Best example is the dependent care deduction, which was passed in 1986. This was not pegged to inflation and is still $5000. Had this kept up with general inflation, it would be around $17k. Had it kept up with healthcare or childcare inflation, it would be around $31k. Boomers had a much more generous tax code than millenials did.
Everyone has challenges and boomers certainly did. However, there are huge changes we need to make to improve public finances. Boomers have to be a part of that solution and understand how the world has changed since they were parents. Boomers can rage that they were promised by the system to have certain benefits, but that system is headed to insolvency. Boomers are asking millenials and Gen Xers to fall on their sword and pay little to no price themselves. I am not voting for that.
Everything was going great until 2001…and Bush policies prior to 9/11 weren’t that irresponsible as the 2003 was the extremely irresponsible tax cut and not 2001.
True but he had the presidency for 8 months before 9/11? I can’t give him much credit for 8 months. His instincts were right to reform SS in 2005 but that was sunk by Dems. Had he pulled that off, he would have enjoyed a pretty good revision of his image.
SS privatization was the dumbest policy ever!! Gore had the correct reform package and Trump is following Gore’s lead. Man, Republicans are awful not because of Trump but because of Bush!! Trump is actually a mediocre president while Bush stole the 2000 election and proceeded to be the worst president in history!!
The obsession of this age is "identity". Everyone must be shuffled into groups and then grievances between groups are invented to the advantage of exploiters, grifters and degenerates. Somehow the answer is always for one group to steal from another group.
There seems little doubt that the US is an oligarchy. That is the norm for democracies, republics and just about every political entity.
In the US that oligarchy is largely a feature of corporatism not generation. It has nothing to do with boomers or blacks or jews or any of the invented letter generational groupings.
I inherited modest sums from my Parents and hope to pass on that inheritance and more to my children.
History hands every generation it's own challenges. The signature trend I've witnessed in my life are the decline of Christian faith in successive generations and the rise of nihilism inspired by scientism.
The central dogma of this age is that there is only matter and energy and we are sacks of meat. Doctrinaire adherents to the religion of this age are even inclined to deny consciousness since it can be neither be defined nor explained as emerging from matter.
Everything else is noise and justification for crime.
I agree with about everything you've said but I doubt any other age didn't think any less in terms of groups.
One fallacy common to both the author of the book and the author(s) of the post is that most boomers are conservative. It simply isn’t true.
Hello. I'm old and i don't want to deny any benefits i had to the young. For example, i had the benefit of a 91% tax rate on the rich. That left the government a lot of money to help everyone else. Even after JFK slashed the top rate to 70% we were still able to have Medicare. Even Eisenhower and Nixon supported many social programs. Since Reagan/Thatcher it's gone the other way. Stop spending on wars and make the rich pay their fair share and the problem would be greatly reduced. It's nor the old that's the problem, it's the new division of the money.
Individual income taxes in the 1960's averaged 7.2% of GDP. In the 90's, they averaged 8% of GDP (dot-dom boom mostly) then dropped in the tech implosion. By the mid 2000's it was in the high 7's, then tanked in the 2008 recession. By the middle of Obama we were back to 8%, and for the last 10 years individual taxaes have averaged about 8.5% of GDP.
https://www.whitehouse.gov/omb/information-resources/budget/historical-tables/
That's the OMB. It's good data. Look at table 2.3.
Overall American revenue as % of GDP has fluctuated between 15% and 20% since 1950. It dropped into the high 14's only twice over that time. Spending has been far less consistent. We kept spending in the same 15-20% range until Reagan. He spiked it to win the Cold War, but we never brought it back down. Spending remains at about 25% of GDP today, hence our massive deficit.
The narrative you're peddling just isn't true. High marginal rates did not produce some huge income tax boom in 50's or 60's. The data to prove that is readily available.
“Tech implosion”…very funny! Like Amazon and Google and Facebook and Apple never happened. No, what happened was the Bush Tax Cuts were extremely irresponsible because we actually ran a surplus in 2001 during a recession!! The lies you people tell yourselves to shirk responsibility for Bush never ceases to amaze me!!
I lived in Silicon Valley at the time, man. Believe me, the dot-com bust of 2001 was a "tech implosion".
I'm sorry to dump this much inline, but I hate arguing about things for whcih the data is readily available. Individual income tax as a percent of GDP:
1993 7.5%
1994 7.6%
1995 7.8%
1996 8.3%
1997 8.7%
1998 9.3%
1999 9.3%
2000 9.9%
2001 9.4%
2002 7.9%
2003 7.0%
2004 6.7%
2005 7.2%
2006 7.7%
2007 8.1%
2008 7.7%
2009 6.3%
2010 6.0%
2011 7.1%
2012 7.0%
2013 7.9%
The period of 1998-2001 is a severe outlier; there is no other 3 year period since 1950 where tax revenue exceeded 9% of GDP.
Bush tax cuts were passed in 2001 and 2003. disentangling the dot-com crash from the former (2001 cuts) is impossible. The latter did likely cause the half-point drop in 2003, but by 2005 it's recovered completely. (Whichi, incidently, is exactly what the supply siders said would happen.) If Bush is to blame for revenue drop in his term though, are you also willing to blame Obama for the drop in 2010-2012?
The big picture from looking at all 75+ years of data is that presidential ambition and Congressional actions appear to have only minor effects on tax revenue. That sounds weird, but that's the pattern you see.
BTW: Tax % of GDP has been above 8% for all of Donald Trump's years in office.
You do realize that proves me correct? Because GDP was strong in 2003 and 2004 and 2005 and so revenue should have been higher. 😝
Listing rev / % GDP corrects for exactly what you're talking about. However, if you really want raw numbers (total IRS revenue):
2001 $1.782T
2002 $1.853T
2003 $1.952T
2004 $2.018T
2005 $2.154T
2006 $2.407T
You're right: we ran a surplus in 2001. And revenue went up every year thereafter. Bush's tax cuts did not significantly diminish tax revenue. So why didn't we have a surplus in 2005? Because we spent even more.
The story of post WWII tax revenue is one of amazing stability regardless of which party was in charge. Changes in marginal tax rates, recessions, huge policy swings... it did change revenue, but only within a very narrow range. What does change over that time is spending, particularly after 1980 -- thanks Ronnie.
Nathan started this by saying that high marginal tax rates produced a windfall for the govt, and dropping them caused a withering of the programs he thinks are important. This is patently and obviously false.
It's not about which party you like. It's not about Bush or Biden or Trump. It's about the truth. I have no problem saying that Bush spent like a drunken sailor. I do have a problem with someone who says 90% tax rates are the key to good government.
Thanks Ronnie?
Give me a break. When Reagan left office on 1/20/89, the federal debt was $2.7 Trillion, with annual budget receipts of about $900 Billion. When Bill Clinton left office on 1/20/01, federal debt was $5.7 Trillion, a doubling of the national debt in his 8 years, and both receipts and spend were about $2 Trillion a year. George W. Bush left office on 1/20/09, eight years later, federal debt was $10.7 Trillion, an increase of $5 Trillion over 8 years, another doubling of our national debt, where federal spending increased to $3 Trillion while revenues only increased to $2.5 Trillion.
Since then, over the past 17 years, our national debt has ballooned to $39+ Trillion, a quadrupling of our national debt, where federal spending is now $7+ Trillion and revenues are "only" $5.25 Trillion.
Thanks Ronnie?
lol, you saw the 2000 numbers and conveniently left them out!! You are flailing! 😝
Edit: my data says 2001 revenue was $2 trillion…I’m not sure what you are trying to pull?? Btw, look at revenue every year and it almost always goes up outside of a recession and then usually it’s only a year with lower revenue than the a previous year…having revenue lower than 2001 for several years is an anomaly because the tax cuts were so massive.
Nice try. Let's try this. What if the hundreds of billions spent on the ICE, the idiotic Iran debacle, etc. were spent on social programs? Would that make a difference? Let's try again. What if trillionaire Musk paid 91% tax and it was spent on social programs, in healthcare, education, housing, etc, would that make a difference?
Let's say Musk makes realized capital gains income of $50B a year. (That would be a 5% return, which is reasonable.) If you were to commandeer 90% of that, you would have $45B to spend. It's a lot of money to you and me, but the US budget is about $3500B.
Note, I do not really accept the libertarian premise that taxing billionaires at 90% would erode investment. Musk does not appear to be motivated by money. He's on a mission to preserve humanity by making us a multiplanetary species. So I don't think taxing his income at punitively high levels would affect his investment decisions all that much. (Other than giving him less to invest, and considering Musk's business track record, that's a significant drawback. Unless you think govt bureaucrats will be even better at investment than he is, which there's no evidence of anywhere in the world.)
You're changing your argument. "We used to have a 91% tax rate and that gave the government plenty of money to do stuff." Your claim was that we have a revenue problem, specifically that individual income tax revenue has declined. Data does not support that. In fact, the data says exactly the opposite.
Our deficit is not caused by a decline in revenue but by an increase in spending. Could we make up for it with more taxes? On paper, sure. In reality, the stability of the tax burden over 80 years makes me suspect that 15-20% of GDP range is pretty hard to break out of (for Americans).
I've been away from this argument for a day. What a relief to not be on the net!
But to resume, Musk is just an example. The 91% would apply to all billionaires. That would supply some more revenue i'd say. You've got the statistics to back me up with that so please supply.
As for spending my issue is what the money is spent on. More unnecessary wars that expose to the world how weak we are? More money for the ICE gestapo so Trump can try to imprison anyone who shows him up as foolish and a "loser." (and what kind of person needs to constantly prove his worth by aggression and lying - thank you Papa Trump for creating this deeply confused and rageful man, continually harming the U.S. and the world through his poorly restrained impulses). And this is not to even begin to deal with the duopoloy of graft in the Congress and in the Robber's Court.
Do you think there might be some money left over to improve the projected but neglected Social Security shortfall, that we might have a medical system that doesn't deny care to many if not most or bankrupts them if they can apply?
i went to a free public college. It was run by educators, not CEO's. Could we have that again for all the lifelong indebted that we are now producing.
Etc. Etc. Etc. for every issue that most of our 350 million citizens need and are not getting.
I have no problem with ICE deporting illegals, but you'll get no arguments from me on wars. I elected a guy who campaigned on "no more foreign wars."
The problem with "tax the rich" is that there just aren't enough really rich people. There are less than 1000 billionaires in America. Tax their realized capital gains at about 50% (remember, they pay state taxes too, so any higher risks significantly altering their behavior -- thanks Arthur Laffer) and you will still only net a few hundred billion $$$ a year. And that assumes they don't relocate their investments, which many would.
The only solution is broad but relatively small marginal rate increases (3-5%) that hit everyone: rich, middle, and lower class (the bottom 50% currently pay nothing) coupled with relatively deep spending cuts. That means chopping the military and tackling entitlements. Republicans that insist spending cuts alone will do it (or my favorite: "waste, fraud, and abuse") are smoking something. Democrats who insist taxing the rich will do it are also smoking something.
As Gene mentioned below: Clinton & Gingrich balanced the budget. (They had help from the dot-com boom, but they really did cut spending.) Was late-90's America a living hell where children starved and poor grandmas ate dog food and millions went without a place to live? I certainly don't remember it that way. I was in state college then, and it was about 1/3 the price of the one I'm sending my daughter too this fall.
We might quibble on some of Trump's policies, but I suspect you and I are more in agreement than it first appeared.
No, Clinton achieved a surplus by jacking up tax revenue while slashing defense spending…in 2000 Bush literally ran on slashing taxes and jacking up defense spending!! And thanks to over 80% approval after 9/11 Bush accomplished that. Wow, you are really bad at this! 😉
I've given you lots of data about the stability of tax revenue over 70 years. You desperately want this data to say something that it just doesn't.
https://fred.stlouisfed.org/series/FYONGDA188S
Total Federal Spending %GDP:
Reagan 1: 22.2%
HW Bush Year 1: 20.2% (yes, Reagan cut spending as a % of GDP)
Clinton year 1: 20.5%
Bush Year 1: 17.6% (yes, Clinton also cut spending)
Bush year 7: 18.9% (too bad he didn't continue the pattern)
Obama Year 5: 20.5% (2008 recession spiked the numbers for 4 years)
Trump Year 1: 20.3%
Trump Year 7: 20.6%
Biden Year 3: 22% (COVID spiked the prior 4 years)
Trump Current: 22.8%
Revenue and spending have fluctuated within a fairly narrow range for a many decades. The problem is that both parties have chosen to spend more than we take in (on different things, yes) for the last 30 years particularly.
I agree with you that Clinton deserves great commendation for being the only President to preside over actual reductions in spending amounts in the last 50 years. He also had a spending-adverse GOP Congress for most of his term, which helped him reign it in.
Out of curiosity, I had Claude highlight on that chart when there was divided govt: https://claude.ai/public/artifacts/517750f6-934f-4ff3-ac3d-d7312c1a6b1e In every case prior to Trump, unified govt resulted in higher spending at the end of the period than the beginning. Divided governments tended to keep spending flat (except Clinton, who lowered it.)
The chart that ought to scare the crap out of you is this one: https://fred.stlouisfed.org/series/FYOIGDA188S
I think I’ve had those discussion with you before…you are invested in multiple false narratives and you are lying to perpetuate the false narratives. You are most likely a sociopath and I am blocking you so that I don’t waste any more time presenting you with easily accessible facts.
Politics aside, the corporate advertising world and every health and fitness industry, be it corporate or just some self proclaimed guru, are all trying to sell you an extension on your time here in this world, where nothing lives forever. Promoting life extension beyond healthy habits is an economy that plays to a buyer’s fear and a seller’s greed…or is it just the lust for more by both parties?
It’s interesting that there seems to be a misapprehension that a sympathetic judge could just abolish the Senate and Electoral College because it obstructs the authors mere opinion that they should. The Baker decision was bad enough as it is.
An interesting piece. I have not read the book so cannot testify one way or the other about the reliability of the portrayal by this exposé. I do note that alleged number of illegal immigrants is not 50 million it is more like 11 to 14 million according to my sources.
And amazingly, it has remained at around 11 million for decades even though millions more keep crossing the border. Truly a wonder of nature.
Note that he didn’t say “illegal immigrants”, he said “people who should not be here”, iirc. That would include not only illegals but also, be could argue, people with TPS, “asylum seekers,” people on most work visas, people entering in family reunification aka chain migration, etc. In a nation with a housing shortage and other such problems, only people who have a right to be here or who offer a strong benefit to society should be here.
I am a boomer. I think the most significant financial fact of my life is that I worked during the period in which women entered the workforce in large numbers. Since house prices are basically auctions, this raised the price from something requiring one income to something requiring two. This caused home prices to rise a lot, which was great if you already owned one (me) and not so great if you did not (most young people). So women's incomes were mostly flushed away in increased mortgage interest (and paying other people to look after their kids if they bothered to have children, which increasingly they do not).
Social Security is not welfare. It was paid for by a lifetime of payroll taxes. Every cohort born after 1938 will put more in than they take out. This includes 100% of Boomers, Xers, Millennials, Zoomers and Alphas. It also includes a substantial portion of the remaining Silents. None of these people are responsible for the Ponzi nature of the funding mechanism established by Congress who were member of some unnamed older generation. It was not even FDR's fault as he was adamant it should not be welfare and wanted something like individual accounts. Congress overrode his veto.
Blaming the Boomer generation for the predictable failings of our welfare state should be an obvious red herring.
I sure hope this idea doesn't catch on.
Boomer demographic power used to elect young men, like Bill Clinton. Then it elected middle aged men, like George W. Bush. Now it elects old men, like Donald Trump.
All three men are the same age.
Gen-X is relatively small. Gen-X Dems in particular were wiped out by the Tea Party and subsequent redistricting when the older party leadership threw them to the wolves.
Millennials are larger than the Boomers now, but seem to have been raised with a kind of learned helplessness and hopelessness that limits their ability to change things.
2024 vote exit polls by age:
18–29 54% 43% Harris +11
30–44 51% 47% Harris +4
45–64 44% 54% Trump +10
65++ 49% 50% Trump +1
Boomers elected Clinton and Bush, but they did not elect Trump. He IS a Boomer, but Gen X (my generation) elected him.
I agree about the Millennials; they're useless, maybe worse. And they're going to live forever courtesy old-age technology. I think Rod Dreher's view is accurate: Gen Alpha will either save Western Civilization or sink it for good.
Interesting. I suspect younger Boomers and older Gen-X are more like each other than different members of their own generation. People who were born in the 1960s are the "Reagan kids".
The largest age cohort is near the end of the Baby Boom, then it drops rapidly through the 1960s until the early 1980s.
I am late Gen-X: Too young to remember the moon landing. Old enough to remember Challenger. I remember Reagan being President, but not much about him being President. Communism fell right after we first learned about it in social studies class.
The problem with Millennials is that the best and the brightest of that generation suffer from "Straight-A student syndrome". They were rewarded for box checking, rule following, and getting the "right" answer. They were told that doing all these things would lead to unlimited success and are having a major crisis at middle age because they don't.
Even right wing Millennials, like Stephen Miller and J.D. Vance, are just parroting the ideas of older right wingers. (And worse, taking them seriously. Rush Limbaugh saw himself as an entertainer.) Stephen Miller is the product of the fever swamps of the Southern California right of the 1990s, while J.D. will wear any ideology that he thinks will get him ahead.
You and I are the same age man: we missed Neil Armstrong but we remember Christa McAuliffe. And I suspect you're right that the hard and rather arbitrary lines we draw between generations are much blurrier in reality.
NASA’s original choice for the Challenger mission was Big Bird.
Have none of you people met (the majority) of “Boomers” who are NOT upper middle class?
Adults aged 50 and older are the fastest-growing segment of the homeless population in the United States, not to mention that 60% of American Seniors (THE MAJORITY) live on $2000 a month OR LESS.
A great review! I'm always amused by plans to remake the Senate into...another House of Representatives. No, folks, there were TWO houses designed - one proportional/representative and one meant to preserve the voting presence of less populated states. If you don't like the Senate, change the Constitution (which also by design is very hard to do).
And re: solving America's old-age problem, yes, curtailing illegal immigration is a great first step. THEN, we ask every 45-year-old citizen remaining, "Hey! Do you want to spend the last half-decade of your life rotting away in a dirty diaper in a nursing home?" I'm guessing the answer will be a 100% resounding NO!!! Until we have a national conversation about our inherent right to end life on our own terms (no ministers OR DOCTORS allowed!), then the cost of aging will continue to skyrocket and our deficit problems will not get solved. Thank you for this post!