A few weeks ago, Robert J. Samuelson wrote an excellent column describing why young people should be angry. Here's why. The two largest government programs, Social Security and Medicare, transfer wealth from the young and working to the old and retired. These programs are set to grow much, much larger in the coming years, as the Baby Boomers retire and live longer (a good thing!). This threatens the fiscal position of the United States, because the number of workers supporting each retiree is going to shrink. Reasonable solutions to this problem include raising the retirement age, indexing benefits to prices not wages, progressive indexing of benefits (so that wealthy retirees don't receive as much as middle-class retirees), and increasing Medicare co-pays while introducing competition into the system (see: Medicare Advantage). But since these solutions are reasonable, they stand no chance of happening. President-elect Obama, for example, has pointed to Medicare Advantage as one of the few programs he wants to cut. He wants to increase governments' responsibilities while sheltering individuals from risk. If entitlements grow without reform, either taxes or the deficit will skyrocket, and possibly both. You get stuck with the bill. Today, though, economist Casey Mulligan has a fascinating post on why Obama's victory may prove troublesome for those who do not want to reform our gerontocratic entitlement system:
2008 did not stop the aging process for the baby boom, or for anybody else. However, the stock market and housing crash delayed many retirements. With many of the baby boomers remaining in the workforce with the young, it is less likely that they will identify with retirees. Even if they do, work will keep them busy -- maybe too busy to pay much attention to political matters. This year also witnessed significant innovations in political fund raising, with much of the credit going to the Obama campaign. The previous campaign finance reform ultimately did not stop the collection and disbursement of hundreds of millions of political dollars. The young survive to fight another political day, and to do so with more numbers and dollars than we previously expected.
We'll see.