The coming fiscal war between the old and the young
In the London Times, Anatole Kaletsky outlines a soon-to-escalate generational conflict between seniors and younger voters :
The politics of the next decade will be dominated by a battle over public spending and taxes between the generations. Young people will realise that different categories of public spending are in direct conflict — if they want more spending on schools, universities and environmental improvements they must vote for cuts in health and pensions.
Schools and universities are more important for a society’s future than pensions. Yet every democracy around the world has made the opposite judgment. While many politicians claim to be obsessed with education — recall Tony Blair’s three priorities were “education, education and education” — in reality they support health and pensions to the point of national bankruptcy, while squeezing universities. The same applies to the many fiscal benefits heaped on pensioners over the years. Is it, for example, better for society to offer free bus travel to wealthy 80-year olds rather than students or impoverished youngsters looking for their first job?
He half-seriously tosses out this interesting solution:
Here is a modest proposal to avert this awful outcome. Since children under 18 are not allowed to vote, perhaps pensioners could be deprived of the right to vote after 75 or 80. An equally effective alternative would be to give mothers an extra vote for every child under voting age.
Me: I dunno. Every entitlement reform plan I have seen basically excludes cuts on seniors currently getting benefits. And healthcare reform was passed despite projected cuts in Medicare. So it can happen. And changes can linked to income so they don’t bite middle-class folks. Here is a bit of insight from Andrew Biggs of AEI:
Social Security reform involves raising taxes or cutting benefits in ways that people can easily understand, and dislike. But a sensible Social Security program is easy to imagine: solid protections for the truly old and the truly poor, coupled with universal retirement savings accounts for everyone else. There’s no free lunch, but neither is it an impossible task.