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Money in Hyping the Generational War Story


US Politics & Gov't  (tags: abuse, americans, congress, corruption, dishonesty, economy, elderly, ethics, elections, Govtfearmongering, healthcare, lies, Medicare, media, politics, propaganda, republicans, socialsecurity )

Kit
- 1364 days ago - truth-out.org
At the same time that we are seeing growing support for proposals to increase Social Security benefits it appears that we are witnessing another set of calls for generational warfare.



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Kit B (276)
Tuesday March 18, 2014, 12:17 pm
Image Credit: Social Security via Shutterstock




At the same time that we are seeing growing support for proposals to increase Social Security benefits it appears that we are witnessing another set of calls for generational warfare. The argument of the generational warriors is that the Social Security and Medicare benefits received by our parents and grandparents pose a threat to the living standards of our children and grandchildren.

The generational warfare argument may not make much sense, but many people with money stand behind it. Therefore we are likely to hear it frequently in the months ahead.

The basic facts are simple. The country will see an increase in the ratio of retirees to workers over the next two decades, but it is not qualitatively different than the increase in the ratio that we have been seeing for many decades.

The Social Security trustees project that in 2035 there will be just 2.1 workers for each beneficiary. This compares to 2.8 workers for each beneficiary today. By comparison, the ratio of workers to beneficiaries was over 5.0 to 1 back in 1960. In short, we already have seen a much larger drop in the ratio of workers to beneficiaries in the last five decades than the decline we face going forward.

Insofar as we would expect a lower ratio of workers to retirees to hurt living standards we would have already seen most of the effect. In fact, we are paying considerably more in Social Security taxes now than in 1960. The current tax rate is 6.2 percent on both workers and retirees; this compares to just 3.0 percent back in 1960. There is no remotely plausible story in which young people today will see anything like the tax increases faced by their parents' generation.

The first generations of beneficiaries did get a very good return on their Social Security taxes, but these people have long since passed on. The baby boomers will largely get a return that reflects what they paid into the program. The people claiming the baby boomers are getting a bonanza from their Social Security are either not very good at arithmetic or dishonest.

However the more important point is that the focus on Social Security taxes is hugely misleading. The next generation's standard of living depends far more on their before-tax wages than what gets taken out of their check for Social Security taxes. And here there is both good news and bad news.

The good news is that the Social Security trustees project that average compensation will rise by more than 60 percent over the next three decades. This means that for each hour of work in 2043, workers will get 60 percent more on average in wages and benefits than do workers today.

That's the good news. The bad news is that this figure refers to the average, not necessarily what the typical worker will get. In the last three decades most workers have seen little benefit from economic growth as most of the gains have gone to those at the top: CEOs, Wall Street types, and highly paid professionals like doctors and lawyers. If this pattern continues, then workers may not enjoy higher standards of living in 2043 than they do today.

But it is important to realize that the threat to future living standards comes not from demographics, the impact of a falling ratio of workers to retirees will be very limited even in a worst case scenario. The real threat to the living standards of young people is the continuation of the upward redistribution that we have seen over the last three decades.

This should have lead people to wonder why we hear so much about the retirement of the baby boomers threatening the living standards of young people. For example, National Public Radio recently ran a piece which seemed to be complaining that young people didn't resent their parents' Social Security and Medicare. MSNBC gave us a segment in which Abby Huntsman, the daughter of the unsuccessful presidential candidate, made bizarre claims about Social Security being an impossible burden for young people. And the Washington Post routinely uses both its news and editorial sections to hype the need for cuts to Social Security and Medicare.

There is a simple explanation for the prominence of the Social Security scare stories. There is a lot of money behind it. The one percent types who have benefitted from the upward redistribution of the last three decades find it very useful that national debate focus on $1,300 a month Social Security checks rather than the policies that made them incredibly wealthy.

People like Peter Peterson, who made his fortune on Wall Street, would rather not have public discussion focus on the tax loopholes that made his private equity business so profitable. Similarly, Washington Post owner Jeff Bezos, probably does not want much public debate on the fact that he made tens of billions by allowing people to evade state and local sales taxes.

The list goes on, but as long as the wealthy can focus public debate on retirement benefits for ordinary workers, they can keep the focus away from the policies that allow them to get rich at everyone else's expense. And the rich are prepared to spend lots of money to keep the public distracted. We can expect to see many more pieces about Social Security bankrupting our children.
****

By Dean Baker | Op-Ed | Truth Out |
 

Past Member (0)
Tuesday March 18, 2014, 12:22 pm
The indoctrination to generational war is another propaganda element of the wealthy elite's plan to divide and conquer the 99%. The vast majority of people in all age groups are struggling just to get by while the 1% laughs all the way at the bank. The real war is the class war. We need greater solidarity between all the differing peoples of the 99% to remember who the real enemy is: the wealthy.
 

Craig Pittman (52)
Tuesday March 18, 2014, 2:10 pm
The hype over retirement benefits is a red herring created by the 1%. I agree Brian, the real war is the class war but the divide and conquer strategy seems to be working well for the 1%. Thanks for the story Kit.
 

Dandelion G (367)
Tuesday March 18, 2014, 2:46 pm
Well stated Brian......another one of the divide and conquer tactics. I've cried at listening to some Elders who said they will allow themselves to starve so that their Grandchildren can live, they truly believe this propaganda out in the media. Sweet Elders of both men and women willing to sacrifice to their death so the younger ones can live. It is cruel what this 1% does to the rest of us......absolutely sinister.
 

Terry King (113)
Tuesday March 18, 2014, 3:20 pm
If it does become us against them... I wouldn't bet on them!
 

. (0)
Tuesday March 18, 2014, 4:39 pm
We are hearing the same things in Canada Kit where CPP is concerned. I've paid into that for 35 years and I do want my cut Mr. Harper. If you're not doing anything with it then let me invest it.
 

Dandelion G (367)
Tuesday March 18, 2014, 5:43 pm
They did the same here Ros, raised it to 67 for those born 1960 onward. Those born between 1943 and 1954 is now 66 and each year up to 1960 they had added 2 months. They also keep cutting back the percentage of what someone can get if they early retire, at age 62.

That creates a financial hardship on many, but with this terrible job economy, many have had to early retire because they are laid off from their job, run out of their unemployment, all savings are used up, and if they manage to squeak in at age 62 they grab the income rather than being totally out on the streets. The older the worker the less likely they will be hired, and many older workers are let go because frankly the uncaring will turn around and hire a new body at the lowest wage possible rather than keep someone who was loyal and had earned their higher salaries after giving so many years to the Company. This is another consideration that isn't being addressed so too many are forced into retirement and low income for the rest of their lives.

Then there were the "Notch Babies" that some still feel they got cheated upon, my Mother was one of them. Those born between 1917 and 1921 that had their formula changed so they got lower benefits. That was to be a correction because those before that date got more based on what they said was a flawed formula. So this changing of formula's has happened before, and then there was talk to do a "Chained" formula.

It was also discussed about raising the retirement to age 70 and I guess if the heaviest thing you carry is a pen or brief case not so bad. But for millions who are in the trades climbing ladders, moving furniture, lifting heavy trays while waiting on tables, so on and so forth, it is hard enough making it to the retirement age it is now, let alone 70.

It is always so called fixing things by taking more from those who are on the lower ends of things financially when there are other ways to do this, like scrap the cap. But the money people have the reigns so we'll just keep hearing how they want to tighten things on those who can least absorb the changes.
 

David C (183)
Tuesday March 18, 2014, 5:58 pm
thanks
 

JL A (282)
Tuesday March 18, 2014, 7:24 pm
Very much liked the flawed math that had a segment of CA's GOP trying to go after CALPERS and all public pensions that once all the real numbers were revealed died quite suddenly...such that a semi-similar petition effort for a proposition ala San Jose's mayor's horrid proposal couldn't even get enough signatures to qualify for the ballot.
 

Fiona O (597)
Tuesday March 18, 2014, 7:58 pm
I concur completely with Craig Pittman. As usual Craig tells us what needs to be told with very few words.
 

Suzanne O (33)
Wednesday March 19, 2014, 4:21 am
All I know is when I get my information on what my social security will be, it tells me I have to work until 70 to get my full benefits. In my family that is just about the longevity period. I don't expect much anyway. So...
 

Past Member (0)
Wednesday March 19, 2014, 5:14 am
And nothing on the fact that we are living 20 years longer (I started my calculation based on those 21 years old so as to not include infant mortality). Perhaps both sides should be more concern with the accuracy of all the issues in the debate.
 

Dandelion G (367)
Wednesday March 19, 2014, 5:27 am
I signed that petition you presented Ros, thank you.
 

Dandelion G (367)
Wednesday March 19, 2014, 5:49 am
Although that is true John that is why this fact was taken into consideration by the Trustees of the Social Security Fund. Payroll taxes deducted for this fund were just 2% in the 1940s and have risen to 12.4% today to offset this factor. This is another piece of propaganda, telling them they live longer, to get the people to slice their own throats as it fails to tell the full story.

Besides John, whether people are living to 80 or dying at 60, when they are 65 years old they are still dealing with a 65 year old body, that becomes even harder to do certain jobs each year they age. On some jobs one could more easily remain with, desk jobs, using more intellect than muscle and some people actually choose to remain even though they could retire, but for those who have demanding physical jobs or standing on their feet all day it isn't so easy for them to do.

This doesn't have to be a pick your poison situation, there are ways to modify or improve the program without placing people in those situations. One of those solutions as I said was already taken into account. And living longer doesn't always mean living healthier. With the toxins in our food, water, and air, the stress of modern living, people are not necessarily healthier in their extended lives. Many haven't had medical care in years due to lack of a Universal Health Care Program and as stated the quality of foods have gone down among other factors.

 

Angelika R (143)
Wednesday March 19, 2014, 6:51 am
Thx ros, you beat me to posting that petition here as I was unable to submit comments until now. Here's the live link again:
MSNBC: Correct Abby Huntsman’s false Social Security attacks
 

Angelika R (143)
Wednesday March 19, 2014, 6:58 am
THEY'RE ACTUALLY TWO DIFFERENT PETITIONS , here's once again:

Social security works PETITION
Our Future.org PETITION
 

Ingo Schreiner (8)
Wednesday March 19, 2014, 8:35 am
ok
 

Kit B (276)
Wednesday March 19, 2014, 9:19 am

Actually to get your full benefits in the US you need to retire at 72, but by taking them early the penalty is about 10% and both my insurance agent and my financial advisor said take them at 65, the loss is not worth the bother. Social Security is just fine, but for the future all people should be contributing no matter what pension fund they have or what dollar amount earned. Pension funds get lost in bankruptcy, and even wealthy people can go bust. Pay in to Social Security for the benefit of the country.
 

Kit B (276)
Wednesday March 19, 2014, 9:33 am

I had signed one petition and did sign the one about Huntsman's false statements. Thanks for the links Angelika.
 

Arielle S (313)
Wednesday March 19, 2014, 9:48 am
I've read that the average SS is around $1200 a month - not exactly in keeping with the $635,000 per month average CEO pay, is it? Is ANY CEO worth millions every year? Not in my book....
 

Kit B (276)
Wednesday March 19, 2014, 10:20 am

Really? $1200.00 a month? That seems meager at best. People do have to pay rent, food to buy, electric, water and other basic bills to pay. I know that SS is not meant to be the only income but $1200.00 is just wrong.
 

Arielle S (313)
Wednesday March 19, 2014, 12:58 pm
$1269. to be precise... and as this utility goes up by $15 and that cost goes up by $20.... not a lot left. Plus that is "average" meaning some people get less. The sad thing is that these are the people who would, if they could, travel and go out to eat, etc. The other bad note is that I heard last night the average near-retirement age family has about $1000 in savings... they are working so hard just to keep heads above water, that there are no savings.
 

Dandelion G (367)
Wednesday March 19, 2014, 6:32 pm
That is correct Arielle, I just read something today that 1/3 of all those on Social Security have only that for their income and not all of them get the maximum of the $1,269. It also stated that there is a large population who have additional income but it is very low. Small pensions as they didn't work there long, or pensions that have been cut back on due to the economic mess, or IRA's that took a deep hit from the tanking of the economy.

I had seen that statistic as well on the savings in this Country. A lot of people had their assets tied up in their homes and those are now devalued or they can't sell them unless they practically give them away. Basically a lot of Americans are living on a wing and a prayer.

 

Sherri G (128)
Wednesday March 19, 2014, 7:42 pm
"The real threat to the living standards of young people is the continuation of the upward redistribution that we have seen over the last three decades". Excellent article Thank You Kit Noted.
 

Robert B (60)
Thursday March 20, 2014, 6:48 am
What the 1% is doing to the rest of us is criminal. A well managed SS system will always work. What does not work is the BS we have to put up with from those CONS known as "conservatives".
 

Jae A (320)
Thursday March 20, 2014, 12:15 pm
The word "Conservative'' when referring to the GOP is nothing short of a lie now days...i.m.o.

Good article.....interesting/informative... comments that followed in general. Others have said what I might have before I came to the thread. Thanks for the article Kit and to those who added much by their comments.
 

Nancy M (197)
Thursday March 20, 2014, 1:35 pm
I am coming to this late but was surprised to see the age of 72 mentioned.

Last I looked, my "full retirement" age was 67 but you would receive even more if you waited till 70. But it didn't say more after that age.

The "full retirement" age last I knew depended on the year you are born. But receiving even more if you wait till 70 or 72 is a bit deceptive, isn't it?
 

Dandelion G (367)
Thursday March 20, 2014, 2:26 pm
It appears so and as so many use this program in their later years it should be very clear how it works and not so deceptive......as with so many things we get near the end of the finish line and all the rules are changed and not a lot of time to rectify, if ever, when when is at that place in time.
 

Catherine W (35)
Sunday April 2, 2017, 11:45 am
There should be an automatic cutoff for those who make x amount of dollars to collect SS.. IMHO
 
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