By Steven Hill
Millennials may be the most educated generation to date, but they’re earning less today than preceding generations. Factor in high unemployment, stagnant wages, a slowly recovering economy, and student loan debt, and their economic well-being looks precarious. What’s more, Millennials may see a reduced Social Security retirement benefit if changes are not made to how we fund the most popular government program ever. Is there a solution? How can we shore up Social Security’s funding? In his recent book Expand Social Security Now!: How to Ensure Americans Get the Retirement They Deserve, author Steven Hill shows why Millennials actually have nothing to worry about from Social Security—if we make the right changes. In the following passage, he explains why we should expand it rather than cut it back.
Billionaire Peter G. Peterson has been one of the pioneers of this kind of intergenerational doomsaying. Headlines about the old stealing from the young certainly grab the media spotlight. But this one is an old, old trope that never made any sense. Peterson first raised it back in 1982, in the midst of the deliberations of the Greenspan Commission. Social Security, Peterson wrote, “threatens the entire economy. . . . The Social Security system will run huge deficits . . . these deficits will push our children into a situation of economic stagnation and social conflict and create a potentially disastrous situation for the elderly of the future.”
Peterson became greatly distressed when the Greenspan Commission did not undertake his prescribed overhaul of Social Security. So after Peterson made his billions on Wall Street, he founded his eponymous Peterson Foundation, as well as other organizations like the Concord Coalition and Committee for a Responsible Federal Budget, to help promote his wild-eyed prophecies about the coming intergenerational war. He has used his various organizations to, among other crusades, fund college and high school campaigns and organizations called “Up to Us,” The Can Kicks Back, Lead . . . or Leave, and Third Millennium, which have served as the youth arm of his various entitlement-busting efforts. The Can Kicks Back president Ryan Schoenike was quoted in the Washington Post as saying, “The [federal] debt is now the top of line issue for most young people,” but Salon’s Alex Pareene called that “a weird lie.” Pareene also pointed out that this wasn’t the first “pretend youth group” founded or funded by Peterson. Peterson has spent a good chunk of his billions stirring up a youthful mob with pitchforks, pushing them to bang at the gates of their grandmas and grandpas for stealing their birthright.
But Peterson hasn’t been the only Cassandra prophesying a generational war between young and old. More recently, the Washington Post’s Robert J. Samuelson took up the cause. “We need to stop coddling the elderly,” he wrote in a 2013 column, calling Social Security and Medicare “a growing transfer from the young, who are increasingly disadvantaged, to the elderly, who are increasingly advantaged.” In a 2014 column, Samuelson continued his anti-elderly and antigovernment debt diatribe, writing, “Giving the elderly as a class special treatment heaps the costs of deficit reduction on workers and children.”
Pitting the elderly against children makes little sense for many reasons, but one obvious one is that today’s children will one day be seniors themselves. And they will need the retirement benefits that people like Peterson and Samuelson are trying to cut from retirees. Robbing Peter to pay Paul might make sense from a maniacally focused budget buster’s perspective, but it makes little sense from a public policy perspective. If that makes sense, then why not cut funding from cancer research, or diabetes treatment, since those ailments mostly affect older people and not the young. But obviously the young today could be attacked by those ailments tomorrow. Society benefits as a whole when it tries to address conditions that affect humanity as a whole.
One of those conditions is growing old. Everyone will pass through that stage of life (unless death comes knocking prematurely), and it makes no sense to not do all that is humanely and financially possible to help the elderly. Otherwise, where might this sort of knee-jerk reaction end? Why not pit middle-aged people and their needs against seniors? Or against children,for that matter? Or, as Altman and Kingson put it, “There is much more inequality within any given age group than there is between age groups.” For example, there is a lot more inequality between wealthy seniors and poor seniors, and between youth from wealthy and poor families, than there is between seniors and youngsters. It simply makes no sense to carve up the class distinctions in this way and point an incriminating finger that pits the young against the old.
Interestingly, economist Dean Baker, from the Center for Economic Policy and Research, points out that other countries have successfully supported both the elderly and the young. According to Baker, “Countries that spend a larger share of their GDP supporting their seniors also spend a larger share of their income supporting the young.” In his study, Baker found that a dollar of additional per capita spending on kids is associated with sixty-seven cents of additional spending on seniors. In other words, he says, it’s not a case of one or the other. “The countries that are willing to spend more to support their seniors are also willing to spend more to ensure that their kids get a decent start in life.” And in looking at policy choices over the past couple of decades, what becomes additionally clear is that any savings from cuts to Social Security and Medicare are not necessarily going to benefit programs for children. More likely they will end up as tax cuts for businesses, banks, or the wealthy, or will pay for the latest high-tech versions of military equipment.
In fact, if you want to really deal with the sources of debt that will drown the prospects of younger people, let’s talk about health-care costs. The nation now spends over 17 percent of our GDP on health care, which is twice as much as the amount spent by virtually every other developed nation (and we only cover about 89 percent of the US population, compared to those nations covering 100 percent). Those costs are simply unsustainable and will bankrupt future generations. Note that cutting Medicare or Medicaid benefits, as the Pete Peterson’s of the world want to do, will solve nothing because it will just push those costs onto the private sector (in fact, that would make things even worse, since Medicare and Medicaid are actually much more cost efficient than the private health-care system). So yes, future generations will in fact drown in debt—if we don’t address health-care-cost inflation. But that has nothing to do with Social Security, or even the thrifty Medicare.
Social Security will always have somewhat of a perception problem among younger Americans. For a certain number, it will always be viewed as “money for old people who get it from the government.” For people of any age who are working and having taxes deducted from their paychecks, Social Security is a benefit for someone else—elderly retirees. But at some point in their life, those people will no longer be able to work, and, like any type of insurance, Social Security will be there to protect them with “wage insurance” from a complete loss of earned income. Social Security is self-insurance in that way, that is, protection against the risks we all face due to old age, disability, or death. That’s a point that must be brought home to every new generation of young Americans.
And the evidence shows that younger people are figuring it out. Much to the chagrin of the “generational war” propagandists, their campaign does not seem to be gaining traction. A poll in August 2015 commissioned by senior advocacy group AARP found that nine in ten young people (adults under thirty) believe Social Security is an important government program, and nearly nine in ten (85 percent) want to know it will be there when they retire. Nevertheless, the fact that this baseless idea periodically arises from the crypt is proof that if enough money is thrown at a bad notion, it can live forever.
About the Author
Steven Hill is a Senior Fellow with the New America Foundation and a Holtzbrinck Fellow at the American Academy in Berlin. He is the author of six books, including Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers, which was selected by The Globalist as one of the Top Ten Books of 2015. His op-ed’s, articles and media interviews have appeared in the New York Times, Washington Post, Wall Street Journal, The Atlantic, Politico, CNN, C-SPAN, BBC, Financial Times,Guardian, Bloomberg News, Fox News,National Public Radio, The Nation, Salon,Slate,Observer, Fast Company, Business Insider, HuffingtonPost, Le Monde, Die Zeit, Al Jazeeraand many others. His other books include Europe’s Promise: Why the European Way Is the Best Hope in an Insecure Age and 10 Steps to Repair American Democracy. He is a co-founder of FairVote/Center for Voting and Democracy. Follow him on Twitter at @ and visit his website.