The One Percent Turns Class War Into Generational War
by: Dean Baker
November 7, 2011
Major news outlets like The
Public Radio constantly bombard us with news pieces on
the budget deficit. Invariably these stories focus on
the cost of "entitlements," which most of us know as
Medicare, Medicaid and Social Security. The story
pounded home in these pieces - often explicitly - is
that these programs, that primarily benefit the elderly,
are creating the basis for a generational war between
the young and the old.
The media focus both contributes to and follows the
Congressional "supercommittee" scheming to produce a
deficit reduction plan that will almost certainly
involve large cuts to all three programs. There is a
commonly repeated view in
based on no evidence whatsoever, that there will be a
disaster if the supercommittee comes up empty handed.
This means that members of the committee are feeling
great pressure from the 1 percent to produce a package
with big cuts to Medicare, Medicaid and Social Security.
It is truly impressive how the
managed to make these modest protections for the
country's working population (the 99 percent) into the
greatest problem facing the country. The obsession with
cutting these programs is occurring at a time when we
have more than 25 million people unemployed,
underemployed or who have given up looking for work
altogether. One might think that Congress would convene
a supercommittee to get people back to work rather than
figuring out a way to undermine programs that people
need, but it's the 1 percent that pay for elections, not
the 25 million workers suffering from their greed and incompetence.
Since almost no one can be immune to the hysteria that
the media have created around the cost of these
programs, it is worth putting it in some context.
Starting with Social Security, the latest projections
from the Congressional Budget Office show that the
program can pay all benefits through the year 2038 with
no changes whatsoever.
Even if we never did anything, the program would be able
to pay more than 80 percent of scheduled benefits well
into the next century. Since the value of benefits is
projected to rise through time, 80 percent of the
projected benefit in 2040 is considerably higher than
the average benefit received by retirees today.
Therefore, the often repeated comment that there will be
nothing there for our children or grandchildren is a
telltale sign of ignorance or dishonesty.
The cost of making the program fully solvent for its 75-
year planning horizon is projected at 0.58 percent of
gross domestic product (GDP). By comparison, the
increase in annual spending on the military as a result
of the wars in
GDP, almost three times as much. The upward
redistribution from the rest of us to the 1 percent over
the last three decades was 6 percent of GDP or more than
ten times as much as this shortfall. But it is only the
shortfall in Social Security that the media want us to
see as a crisis.
The health care programs, Medicare and Medicaid, pose
more of a problem, but this is because the
care system is dysfunctional. We pay more than twice as
much per person as do people in other wealthy countries
with little, if anything, to show in the form of better
outcomes. (We rank near the bottom of wealthy countries
in life expectancy.)
If we had the same per person health care costs as
we would be looking at long-term budget surpluses, not
deficits. But controlling costs involves reducing the
income and profits of the 1 percent. It means reducing
payments to insurers, drug companies, medical equipment
manufacturers and highly paid medical specialists.
Rather than control costs, the folks in
rather make people pay even more for health care. This
is why we see proposals like raising the age for
Medicare eligibility to 67 or turning the program into a
voucher system. Both plans are likely to protect the
income of health care industry, while making it even
more difficult for current or retired workers to cover
their health care costs.
The public should realize that "generational warfare" is
an agenda that was deliberately designed by the 1
percent to distract the rest of us from the class war
that they have been successfully waging over the last
three decades. Rather than have a public debate on the
policies that have redistributed so much income upward,
the 1 percent want to pit children against their parents
and grandparents, forcing them to fight over crumbs.
In this context, the only victory that the
supercommittee can hand to the 99 percent is a blank
sheet of paper. People will have enough things to worry
about this Thanksgiving without adding a Congressional
plan to slash their Social Security and Medicare.