Amitai Etzioni: The idea is growing that the old get all the benefits while young suffer
But retirees have earned and saved more over the years and should live in comfort, he says
Curbing costs of health care would curb Medicare; he writes: Social Security can pay for itself
Etzioni: In terms of private money, older people give trillions of dollars to the young in gifts
Editor’s Note: Amitai Etzioni, professor of international relations and director of the Institute for Communitarian Policy Studies at George Washington University, is the author of “Hot Spots: American Foreign Policy in a Post-Human-Rights World,” to be published by Transaction this fall.
The coming elections seem to have fired up an intergenerational war, with the older population cast as the “greedy geezers” eating so much of the pie that they leave only crumbs for the younger generation.
Both Republicans and Democrats say that entitlements must be cut. The main losers of these cuts will be Americans older than 65 who collect Social Security and cash in Medicare checks. At the same time, both parties agree that we must spend more on the education of the young if we are to remain competitive in the world markets.
Taking from the old is justified on the grounds that they take more out of Social Security than they paid in, while the young, who pay for Social Security, will find that the program has gone belly-up by the time they retire. Well-heeled older people are said to be enjoying the good life while the young can’t find jobs and are saddled with debt.
Charles Lane, writing in the Washington Post, makes the point with numbers. He cites a report from Pew Charitable Trusts that says the median net worth of households headed by those 65 or older rose between 1984 and 2009 by more than $170,000. At the same time, that of households headed by those 35 or younger shrank by 68%, to less than $4,000. Sixty percent of seniors find it easy to pay their bills and the same percentage expect their quality of their life to improve in the near future.
Others use rather strong emotive terms. Stephen Marche, writing for Esquire, refers to a “bleeding up of the national wealth” to the elderly from today’s disenfranchised youth. The Minnesota Daily editorial board asserts that “while no parent would honestly sell out their children, the U.S has done just that.”
Dale Brandy, writing in the American Thinker, defines Social Security in terms of a class struggle between the “young ‘have-nots’…against the power, wealth, and influence of the older ‘haves.’ ” Health care expert Karl Stockton writes that the “elderly receive the lion’s share (of health benefits) while breaking the backs of the young.”
It makes the elderly sound like the 1% that 99% of the young should rail against.
These hostile statements ignore some elementary and some surprising facts. Social Security comes close to paying for itself, after some recent revisions. The way to curb Medicare, which after all is merely a big reimbursement machine, is to cut the costs of health care rather than leave old people to chose between medications and their meals.
Most important, it should surprise no one that people who completed the work years have earned and saved more than those who are just beginning to work or are early in their work career. And elementary fairness says that people who worked all their lives and saved a considerable share of their earnings rather than spent it all, should be allowed to live out their remaining years in reasonable comfort.
Utterly ignored in all these tirades against the old, is the notion that the elderly get much more than young is based merely on public budgets and pays no mind to what happens to the large mountains of private dough.
The data leave not the slightest doubt that our seniors, far from spending it all on a big going-out party during their retired years – which they surely are entitled to and could do – give trillions of dollars to the young in gifts. A study conducted by John J. Havens and Paul G. Schervish of the Center on Wealth and Philanthropy at Boston College predicts that between 1998 and 2052, a minimum of $41 trillion will pass from one generation to the next. They estimate that more than half of these funds will be transferred through bequests to heirs, about a quarter will go to estate taxes and fees, and the rest will be given to charities.
There seems to be no statistics about the billions grandparents spend, while still living, on their grandchild’s first car, first house, college tuition, and such, but looking around me I find these amounts seem to vastly exceed what grandchildren grant their old folks.
There is always room for reallocating our public budgets, such as cutting the hundreds of billions we are spending in Afghanistan and employing them in nation building at home, or stopping corporate welfare. We may even have to cap entitlements.
But the last thing we need is another heated confrontation and a new line of social division. Instead, children and grandchildren should draft thank you notes to their elders for saving so much and leaving trillions behind.
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The opinions expressed in this commentary are solely those of Amitai Etzioni.