You Can’t Get There From Here (where ‘here’=18%)

July 18th, 2011 at 6:09 pm

I’m going to try to find the link to the MSNBC segment I just did with Ezra Klein today on why the Balanced Budget Amendment (BBA) that Republicans are trying to jam into the debt ceiling negotiations is such a bad idea.  Not for my part, but for the introduction, which laid out the issue very effectively, I thought.

(Also, see this critique by my CBPP colleague Bob Greenstein.)

Ezra used this set of pictures collected by the Center for American Progress, which I found particularly effective.  One of many fundamental problems with the BBA is that it caps federal spending at 18% of the economy.  The last time that level of outlays prevailed was in the 1960s, so CAP took a look at how we’ve changed since then.

Source: Center for American Progress

Life expectancy is up as is the median age of the population and the share of people over 65.  That right there should tell you something about the pressures on retirement security.  And of course the pressures of health costs amplify this demographic challenge

Yes, in order to achieve fiscal sustainability, we need to deal with these pressures.  But that actually takes hard work, like evaluating the cost effectiveness of medical treatments.  You can’t do it by mandating a totally unrealistic spending cap.

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6 comments in reply to "You Can’t Get There From Here (where ‘here’=18%)"

  1. Robert Thille says:

    Note that while the number of people in poverty has increased, it hasn’t increased as fast as the population as a whole, so I think you could argue that we’re doing better there…

  2. Mary says:

    Thanks for all the posts and the answers. I agree with this, “You can’t do it by mandating a totally unrealistic spending cap.” I would like to focus on this from a policy perspective, but my mind is elsewhere. All I know is that the boomers are getting seriously older, and people live far away from each other so social structures are so different from what they used to be. There is this myth that 50 is the new 30 or something like that. Maybe for a 30 year old, 50 will be the new 30, but for a 50 year old, 50 is maybe 45. And 65 is definitely 65. (There are exceptions, but they aren’t the rule.) It only takes one serious illness for people to figure out that as they get older, they get closer to their real age.

    And then what? Are we becoming more independent or more dependent on social services? I don’t know. I know that the US isn’t Japan. Americans don’t treat their elders the way the Japanese do. I don’t know how people are going to go about reconciling this modern life with familial obligations. Loads of people are going to die, and before they die, they are going to get very sick. And that’s going to put all kinds of pressure on just on the government, but on younger generations who will be up to their eyeballs in debt, over-worked, and under-paid, and living in a more challenging global environment than any generation before them. Are they are going to be able to take care of their aging baby boomer parents at the same time as dealing with these extraordinary demands? Quite frankly, it seems pretty scary.

    • Mary says:

      I think Friedman’s piece is ok, but it’s an important topic, which happens to be related to this issue.

      Of course, when you’re talking about generations, you’re inherently talking about generalizations, but that’s the point. A broad analysis of a swath of people born around the same time who go on to shape society, values, economies, etc., during their period of dominance, and potentially forever changing the future of subsequent generations. In fairness, there are many boomers who are really critical of their generation so at least there is some self-awareness. Yet there has been no substantive change in their actions or values, and there won’t be. The generation is too old to change. It’s just going to become more like itself.

      It’s a struggle for me not to engage in generational warfare because frankly, overall, I think the boomers have been a complete disappointment, if not a disaster. (That said, of course, I want to make an exception for anybody I love that happens to be a boomer….) I don’t think history will be kind to the boomers, and I don’t think it should be. In my opinion, part of the reason why people don’t view elders here with the same deference as some other societies is not just due to cultural differences, it’s generational. I view the greatest generation very differently than the boomers.

      To me, boomers are the most selfish, self-centered generation in recent history. They descended upon the earth like locusts, consumed everything in sight and continue to infect the earth with their greed and shallowness. Friedman states, “There are Eric Cantors everywhere — reckless baby boomer politicians for whom no crisis is too serious to set aside political ambition and ideology.” He’s right. With the boomers, it’s generally all about me and mine.

      In this country, there seems to be less rage against the boomers (which essentially form the machine) than in many other societies. I think this is mainly due to Generation Y who many criticize as being nauseatingly conformist. This is also a fair criticism. I don’t think a generation of lickspittles is helpful to a society that’s clearly been misdirected. It may help these people succeed personally, but they are doing a great disservice to others of their generation and younger ones who will be inheriting these problems. Ultimately, this approach will fail because it’s too stagnant, not critical enough, not revolutionary enough, and a time of reckoning will have to come. (After they reconcile themselves to the fact that they are going to be worse off than their parents….) The boomers will mostly be gone by then.

      There was a glimmer of hope with Gen X, but they were too detached and small to really make a difference. Like siblings that fight for their parents’ affection, Gen Xers’ brief counter-cultural inclinations were deemed unproductive and they were marginalized while Gen Y kissed up to the boomers to win their affection and hopefully their inheritance. In addition to all the wonderful qualities boomers possess, they need to be flattered at every turn; they need to have any guilt that may surface as they buy yet another condo that they don’t need or brag about the extravagant vacation that they just took to be justified by the adoration of those younger than them. The boomers need the younger generation to want to be just like the boomers. They need to be told how important they are and right about everything, and Gen Y was happy to comply, especially if it meant satisfying their own ambitions that simply reflected those of their parents.

      So if people want to talk about creating a better economy, a better society, I would say a strong argument could be made that it can’t happen until we transcend the effects of the boomer generation. In terms of the policy, although I don’t think cuts should be draconian, I think it’s only fair that spending cuts affect the boomers, who did not adequately prepare for their retirements because they were too busy buying stuff, and less subsequent generations.

      Boomers inherited the world and managed to squander it. America is in a weaker position on multiple levels due to their choices. That’s the boomers’ legacy. I really hope it’s one that future generations can correct, but given the weaknesses of Gen Y, it’s going to be an uphill battle….

    • Mary says:

      I happened to watch Schindler’s List last night for the first time. Movies about the holocaust tend to give me nightmares off and on for a long time because it’s traumatizing so I have to work up the courage to watch them. But it reminded me of an important aspect of society. People need to think long and hard before they suppress dissent or opinions even if it’s not through punishment but by incentivizing conformity. They need to think about the kind of society they are creating, and do they really want that. It’s important to have people who are willing to sacrifice to do the right thing, that are willing to stakeout their intellectual ground based on objective analysis and hold it despite pressure to capitulate or financial incentives to change their position. A society of conformists or yes men is not just less likely to improve, it’s also more dangerous. That’s my opinion. But I’m of the artistic faction of society, and we naturally don’t conform well. We think for ourselves, and we stand by what we believe to be right even if it is not in our best interests.

  3. David says:

    But if you are one of those wing-nuts who believes that instituting Social Security in the first place was a huge over-reach by government, and who believes that Medicare only compounds the original sin, then none of these demographic changes matter.

  4. Jim In Panama says:

    There’s an even more serious problem with making this drivel an Amendment to The Constitution (IE: Law) …. there is no legal definition of GDP and its content is continually redefined as conditions warrant. This “Amendment” is conceptually half-baked and legally impossible