stevenso (01/21/83)
ELDERLY ARE GETTING A FREE RIDE by Phillip Longman For most Americans, one of the small consolations of the 1970's - that generally dreary decade of scandal, malaise and national decline - was the seeming demise of youth. About the time of the Arab oil embargo, youth went into law school, or else into the woods, and hasn't really bothered anyone since. Herein lies a great paradox. The storm of generational conflict vanished from our politics just when the conflict of generations at last became fundamental - a question no longer merely of lifestyle and contrasting levels of consciousness, but of equity. For throughout the last decade, as the older generation has become ever more militant, organized and politically self-conscious, there has arisen the curious notion that all Americans beyond a certain age should be entitled to a broad public subsidy, regardless of their needs and despite the consequences to the young and the poor. If you doubt this, look no further than to know how the federal government spends its money. This year, 28 percent of the governments outlays will go to Social Security, Medicare and other transfer payments for the 11 percent of the population over 65, all of that disbursed reguardless of need. More than $10 billion in Social Security checks will go to elderly households whose incomes already exceed $25,000 annually, with 130,000 of those households having incomes exceeding $75,000. The federal Treasury will for go $2.4 billion to give everyone over 65 an additional income tax deduction, and another $500 million for special tax breaks when those over 55 sell their homes. Indeed American life is filled with such entitlements, from free health care for all veterans over 65 to reduced bus fares for all seniors. All share one thing: eligibility determined , not according to need but according to age. Once upon a time, the idea of generational entitlement might have made some sense. In 1959, for example, 27 percent of all elderly households lived below the poverty line and retirement was a terrifying prospect for many American workers. Today only 7.6 percent of all elderly households fall below the poverty line, a figure that takes into account not only income but also the economic value of the elderly's subsidized health care, pensions, various tax exemptions based on age and the value of property and other financial assets. (Although) On (the) average, the elderly are not as well off as the rest of America, they have been the only segment of society not to suffer the consequences of a declining national standard of living during the past decade. This is largely because 70 percent of the elderly own their own homes. The hyper-inflation of real estate prices in the '70s brought fantastic, unearned gains to those old enough to have bought early enough, but only at the cost of pricing virtually an entire generation out of the market. Also explaining the present prosperity of the old is the fact that most pensions are indexed to the cost of living, which has gone up faster than the salaries of people of working age. The average Social Security recipient receives in just 19 months as much money as he paid into the system during his entire career, with the younger generation making up the difference. That we owe a great measure of relief to those members of the older generation who are indeed poor is indisputable. Almost a third of the nation's elderly single women, for example, try to eke out an existence on less than $4,000 a year - a circumstance made all the more desperate by the natural infirmities of old age and the loneliness of living apart from friends and family. But it is precisely because we reward all Americans merely for having obtained a certain age, that those who are truly in need, both the young and the old, must make due with so little. Why should we allow the accident oaf a citizen's age to determine whether of not we will save him from disaster? If, after all, one falters before age 65, does he deserve any less help from society? Yet a handicapped young adult dependent today on the government's supplement insurance program (SSI) receives just $285 a month, whereas a handicapped member of the older generation is entitled to as much as $729 in Social Security benefits. There is no explanation for the disparity, save the political power of the old. So far, the young have not awakened to the essential injustice of their condition, but when they do, the results could well be extreme. Consider for example, that between the various transfer payments to the elderly and the interest on the national debt, the young must suffer one out of every two tax dollars they pay the federal government going to support the older generations past and present standard of living. Simultaneously, the young find themselves heirs to a largely mortgaged economy, in which massive investments for infrastructure, energy and "reindustrialization" are required to compensate for the excessive consumption of the past. Just to restore the nations dilapidated bridges, highways and water systems will require, by conservative estimates, over $1 trillion in the next decade. This figure roughly equal to all the admitted debt of the federal government and thus serves to redouble the measure of encumbrance now presented to the young by the old. The magnitude of this encumbrance has no precedence in American history. It results, straightforwardly, from the older generation's failure to live within its means. Since 1964, for example, the accumulated debt of American government, industry and private households has risen almost five fold, from $1.2 trillion to more than $5 trillion. At the same time, the value of the nations productive facilities - its steel mills, oil wells, auto factories and other job producing enterprises - has merely doubled. As Stanley Kaufman, an economist for Salomon Brothers, has noted, these numbers imply that since 1964 Americans borrowed more than $2 for consumption to every $1 of new wealth they created. Herein lies the essential injustice of the new generational politics of the 1980s. In enforcing their claims of generational privilege, the organized old have largely won exemption from the consequences of their own political choices, at the direct expense of the young. That portion of the nation's limited wealth used to subsidize the old who are not needy must be subtracted in equal measure from what resources are available to make long over-due capital investments in future growth. Similarly, the generational entitlements currently enjoyed by affluent senior citizens must be subtracted from the resources available to support the poor, the sick and handicapped of all ages. To those who deserve compassion, we should be unselfish, but each according to his need, not according to his generation.