Make Way for Aging Boomers
Demographics has influenced the course of humanity for millennia and will continue to do so.
It is the reason China adopted the one-child policy. Population decimation caused by the black plague changed the economics of medieval Europe; it revalued labor and sapped the wealth and power of the nobility. The annihilation of a generation of young men during World War I set the stage for fascism as more rational leaders were not there to oppose it.
Demographics is also going to determine the economic future of the United States. The painful, redundant, dogmatic budget debate we have been suffering through is just the first bite of the apple. We are going to see essentially the same thing repeated at semi-regular intervals for years, if not decades.
The reason is simple: There are 76 million, give or take, baby boomers living. They expect to receive the entitlements they have been promised, and they seem remarkably unwilling to understand that the money is not available.
This situation will lead, inevitably, to several things: Benefits will be reduced in some way. Revenue, to use the PC term, will be increased in some way. Discretionary spending will be reduced in many ways. Inflation. The political debate surrounding these events will remain acrimonious, and politicians will rise on promises made and fall on promises unkept.
Our GNP will be squeezed as money is diverted to essentially unproductive purposes. Granny will not be thrown off a cliff, but will quite possibly be moving in with you. The wealthy will do nicely, even with higher taxes, because the wealthy always do nicely, but government dependents are going to have a tough time.
This is all pretty much set in stone, and all the politicians in the country can only twiddle around the edges.
Nobody seems to want to talk about all this, though it is perfectly obvious. Denial is the current course of action. The only way to avert a seriously diminished national standard of living is for the economy to grow at a rate not seen in years, if ever.
People tell me that I'm a pessimist. I prefer realist myself. It's not that I wouldn't like to be more optimistic; it's just that I've been right so often in anticipating the worst that I have a lot more confidence in the negative view.
Is there anything we can do about all this? Not really. There are 76 million people standing in the way. The "big fix" promoted by John Boehner and the president at the beginning of the current flap was itself just a Band-Aid. Four billion dollars in cuts (even if they are real) over 10 years set against a debt ceiling increase lasting only until after the next election doesn't really accomplish much. It just means the next crisis will occur in 2013, when - guess what - the election of 2014 will be just around the corner.
The Republicans are pushing a balanced budget amendment. This seems like a pretty good idea, though the language hasn't been written, and you can be sure there will be some escape clause in it if it ever is. Even that doesn't solve the problem; it just limits the response. The budget can be balanced only with spending cuts and tax - excuse me, revenue - increases.
I would not expect any grand bargain, ever. That would have to approach the level of redefining government itself; politicians are not likely to head off into that uncomfortable territory. I would expect instead many more years of sniping and partial compromise as more boomers retire and eventually, conveniently, die.
This debate will provide the background noise of American politics for the rest of most of our lives. It will wax and wane, but it is not going to go away.
Fred Wolferman lives in Southern Pines. Contact him by email at firstname.lastname@example.org.
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