I regret that I have been unable to frame my arguments in a way to persuade people — at any rate, people open to persuasion — that my views are not insensitive or indifferent to the needs of older Americans. I am 66. I am not “against the old.” Most of my friends are north of 50, and many are north of 70. I grasp the anxieties that accompany aging: the fear of exhausting your savings; or of sudden, incapacitating illness; and of becoming dependent. I am also aware that the recession has fallen hard on older workers and complicated their retirement prospects.
But given an aging baby-boom population and increasingly high health costs, spending on the elderly is already crowding out other important government programs and threatening steep tax increases on working Americans. I plead guilty to making this point repeatedly. Annual spending on Social Security already exceeds defense spending; Medicare is approaching the level of “non-defense discretionary spending,” a catchall of everything from highway spending to foreign aid to education.
It is not “progressive” to support this status quo, especially when many of the over-65 population are relatively well-off and still would be if their Social Security payments were somewhat lower and their Medicare costs were somewhat higher. It’s true that Social Security represents about four-fifths of the income of the poorest two-fifths of Americans age 65 and over. But this dependence diminishes for people higher up the income scale; among the richest fifth, Social Security accounts for slightly less than a fifth of total income. We need to find a better balance between protecting those who need protecting and simply subsidizing those whose fairly comfortable retirements come at the expense of others.
I have been writing about these issues since the late 1970s. What’s depressing is that if we had started making changes years ago — gradually raising eligibility ages and curbing benefits — they could have occurred with a minimum of fuss and disruption. But too many defenders of these programs insist that not a penny of benefits be cut. This is the attitude that has created the present problem. So I will continue focusing on these issues, including the apparent intractability of health spending, precisely because they are so central to the society we will leave our children and grandchildren.
Next, let’s move on to errors. I try to get my facts straight so that even readers who disagree with me will emerge having more information. But when I make a mistake, it’s often a doozy. The grand prize for 2011 goes to a recent statement, in the column “Bye-bye, Keynes?,” that “in the mid-1930s, governments in most wealthy nations were relatively small and their debts modest.”
I was arguing that today’s highly indebted governments have less leeway to adopt massive “Keynesian” stimulus programs of spending increases or tax cuts without triggering a backlash from bond markets — higher interest rates that undermine the stimulus. I still believe that’s true; the evidence is Greece, Ireland, Portugal, Spain and Italy. The United States has not yet suffered this fate; but it’s conceivable, I wrote, that we might. Not everyone agreed.
But agree or disagree, what is clearly not true is that “most” wealthy countries in the 1930s had “modest” debts. Some did: the United States, for example. Sweden and Norway were others. But many countries — notably Britain and France — had huge debts from World War I, as some readers pointed out. This was careless. Apologies.
Meanwhile, Happy New Year to everyone in 2012.