I like the general thrust of this article but i think it misses an important element: everyone gets old and most people have parents and grandparents. so if you do old people austerity, who ends up taking care of them? Yea the young people. And taking care of old people is a huge time and financial drain. Many people want to shunt mom and dad into a home, have the government pay, and not have to deal with that.
and lots of people don’t have kids and even if they do don’t want to rely on them. So being for old age entitlements is more rational for the young than it might look like at first glance.
Raising the retirement age could bypass this problem, given that we know people are living longer, healthier lives than they were when it was fixed at 65.
This was my immediate thought too. Is the alternative to all of these subsidies that every younger person becomes a full-time caregiver? I'm already seeing this happen with some members of my family as my grandparents become too old to care for themselves, and it's a scary prospect without good answers.
I think Richard's answer here would be (unironically) to encourage more voluntary euthanasia. As someone who doesn't want to get old, I'm more sympathetic to that view than some, but I do think it's worth noting that most of the options here are very bad.
Old people starving in the streets and young people being conscripted as caregivers seem like your other options, and both are very bad! A social safety net that massively privileges the old might be the best of a set of bad choices, even for the young. If we don't pay for the nursing home with taxes, then the next thing that happens is grandma moves in with you and your life becomes about taking care of her. I think many people would prefer to pay the taxes.
Any large demographic starving in the streets will basically destroy what you think of as modern society. Even if you personally have no morals and don't care about grandma, other people care about their families,, and those people will turn to ends you do not like when their families are starving.
The practical impacts would be things like:
-Massive increases to crime, as people are forced to steal for their families.
-An updated social contract in which grandma and grandpa move in with you after a certain point and you have (the younger person) to take care of them and support them.
-Enormous and persistent social unrest
-An incredible level of unpopularity for whatever politician caused all this, leading to anywhere from a political wave to some kind of open rebellion.
A big mistake made with this kind of cruelty-politics is the idea that you can costlessly make people who live in a place somehow disappear - by starving them, killing them, deporting them, imprisoning them, or whatever other method you want to suggest. As Trump is learning, making large numbers of people disappear from your society is actually incredibly hard to do, even if you have no morals and you personally find those people useless! Attempts to do this almost always turns out to be more costly than whatever price you were paying in having those people around.
Which, of course, is why things like social security and retirement benefits exist in the first place. It's not that people were duped by some radical liberal empathy, they were solving a big societal problem that was causing them a lot of personal pain.
Good points. I think it's as simple as everyone is afraid of getting old and helpless.
On a personal level, the prospect of ageing into despair seems to be a horror with no end but death, that still might await us all. But the struggles of the young feel temporary, something we all got past.
If nothing else, this puts a measuring stick up to the problems that younger generations supposedly face. If the major downside of the solution to these problems is that they will have to care for their own parents for a few years, like everyone has done for millennia, then these problems we hear about can only be so bad and not worse.
I would focus on Medicare more than Social Security. Social Security has only just barely higher than a 1:1 payout ratio to average liifetime taxes paid ratio. So seniors can reasonably claim that they "paid for" their Social Security benefits. Medicare, on the other hand, is out of control with a greater than 3:1 ratio.
It is totally unfair that cash-strapped young and healthy adults have to pay exorbitant private insurance and provider rates while Boomers in six bedroom McMansions get Medicare. Medicare should be dissolved entirely. Seniors should be moved onto the private insurance market like everyone else. If they are genuinely poor (based on assets, not solely based on income) then give them a subsidy. But if they have a $2 million house, stock portfolio, or large pension then they should have to pay full freight. They can liquidate their large house (which is good for the economy by freeing up large homes for the families with several children who really need them) and downsize to a townhouse and pay for their health care with the proceeds of the sale.
Agreed. Medicare also has massive inherent waste because it's a payment in kind rather than a cash payment. Programs like that can and do give people health benefits that cost far more than they're worth to the beneficiary, driving up overall healthcare prices and wasting our collective resources. Giving people cash as the advantage of ensuring that it will be spent on something that they subjectively value.
But it has the disadvantage that people have short-term bias and will waste cash benefits in the short term when their interests would be better served by saving or insuring themselves. That might very well outweigh the waste you're talking about.
Perhaps, but it requires a pretty dim and paternalistic view to think that people are more wasteful with their own money than Medicare benefits. As evidence I would point to the markedly elevated prices of drugs in this country. People with incurable cancers are choosing drugs that cost $300k per year when a $10k per year option is available which would reduce their expected lifespan by a few weeks. No non-wealthy person would make that choice if it was their own money.
The high US drug prices are basically a disguised subsidy for pharma research. The expected value for the Medicare insurer (US government) isn't just the three weeks, it's also the resulting incentive for incremental progress toward even better treatments.
That isn't to say the whole system is Pareto optimal or anything. But when research costs are taken into account, the overseas prices are artificially low, and historically the public benefits of this kind of research have far outweighed the costs.
I don't disagree that this subsidizes drug research. I don't see how that makes it less wasteful. It sounds like you're saying some of the value of the drug price is R&D for future drugs, but this is just infinite regress. If due to these subsidies it's profitable to develop a drug that barely works and costs a fortune, the makers can stay profitable while destroying social value indefinitely. Why do we expect their next drug to be more useful than the last one?
That expectation comes from the fact that a more effective drug or procedure would be even more lucrative, and also great PR. Again I don't think this is the ideal system, a publicly funded prize system would probably be better, but no such system is in the offing and lower US drug prices would mean a lot less progress under the actual circumstances.
Profoundly tempting policy. My Boomer parents rattling around in their McMansion would say they can’t afford to downsize because there aren’t many townhomes nearby so they’re overpriced for their size—and voila, NIMBYism solved! Or, of course, they’re more than welcome to go in with me on a multi-unit property so I’m not stuck raising a baby in a one-bedroom apartment with no relatives within a thousand miles…It would also make health insurance extremely cheap for healthy young people. I would still lean towards at least a public option, but full privatization with generous subsidies for the poor seems better than the status quo.
In principle this makes sense, but the difficulty with your proposal is the same as the difficulty with a wealth tax: how do you get an accurate enough metric of wealth to apply the subsidy properly?
But you're absolutely right about SS. It was meant to be social insurance, basically an annuity that people were required to pay into. They did so, but the government was a poor steward of the trust fund and now that is coming home to roost.
It’s not hard at all…in fact we already have a program that covers this, it’s called Medicaid. Poor seniors are just as eligible for it as poor individuals of any age.
Is it really that hard to get a decent idea? Most people’s wealth is highly concentrated in their primary residence and retirement accounts. The IRS cares about subsidized retirement accounts already because you’re required to take minimum distributions at a certain age, and it’s quite easy to figure out the value of someone’s private residence, so this doesn’t seem too bad. The difficulty of calculation for a wealth tax aimed mainly at the very rich is much more serious, but this policy is aimed mainly at separating the genuinely needy elderly from those with sufficient savings, and that seems quite doable.
One of the things that drives me insane is the attitude that things like assisted living expenses shouldn't draw down your estate. "Grandma is having to sell her house to pay the exorbitant costs of the assisted living home! That's outrageous!" What?? When you are saving assets for retirement, you're saving for ...retirement, right?
Yeah everyone should pay higher taxes so we can make sure to keep the trust fund baby demographic going. Society doesn't need to support an expectation of inheritance.
Are we against generational wealth or not? Many people will not be lucky enough to inherit homes with or without medical expenses. I guess generational wealth is bad just above the cutoff of how much you expect to inherit.
Generational wealth *is* bad. The whole logic of it is unsound because inherited wealth is by definition an exchange of value A did not work to earn for value that B did. If A is good at being productive, this makes A less incentives to be productive. If A is not good at being productive, this at least keeps him from being a welfare case, but he tends to blow through it and become one anyway.
I commend you for your commitment to touch every political third rail. Can you do veterans next?
People in my state keep voting more and more expensive benefits to veterans, including a property tax exemption with no cap. We've got a bunch of service disabled veterans who "own" (nominally) small business government contractors, win contracts thru quotas, and live in mansions tax-free.
And "service disabled" ain't what it used to be. The VA is giving out more, and higher, disability ratings than ever before. Just about anyone exiting service can make a disability rating happen if they're interested in it. Some statistics here for a start:
It may be a little bit too nuanced for people to understand, but an important part of this is the fact that Medicare in particular is a lose-lose program. Imagine you have enough money to afford a drug that cost $1,000 a month, but you would only be willing to pay $200 a month for it (at higher prices, you would do without or choose cheaper alternatives). If the subsidized price to you is $100 a month and Medicare pays the rest, you're going to take the drug, wasting $800 of society's money. In short, the program costs far more than the benefits are worth, and so cutting it won't harm beneficiaries nearly as much as it will benefit taxpayers.
This is unserious. A serious discussion of this issue would ask questions like how the benefits for these programs compare to the taxes the present-day elderly paid into the programs. Older people are wealthier on average, OK... but how much of the benefits are going to the wealthy ones as opposed to the poor ones? You don't even ask the question.
And when asking about whether to borrow money to fund the programs, surely things like the interest rates and inflation at the time the decision gets made should factor in. It's not just a matter of "you'll have to pay it eventually," that's not quite how public debt works and you should know that.
On the actual policy question, I'm fine with raising the retirement age and/or the 20-some percent benefit cut that would be needed to fix the shortfall. That's probably better than raising payroll taxes. But I'm not fine with you acting like the very sketchy points you make are obviously correct or that the issue is a no-brainer.
Maybe you've reached these conclusions for more sophisticated reasons and are dumbing your argument down for the audience? If so, it would be good to know. Your intellectual honesty has impressed me at times, but your "think from your gut" treatment of these age and wealth issues really calls it into doubt for me.
I think contrary to popular belief and media propaganda a lot of young people love their parents and grandparents and also don't want the responsibility of having to pay for them in old age. Also anyone over above 30 realizes they'll get old eventually and figures if you cut Social Security and Medicare there'll be *nothing* there for them when they get there.
I also think the general precariousness of middle-class and below life these days means people are going to want more supports. The catch with having too many poor people is they support illiberal programs to relieve their misery, whether it's Mamdani or mustache man.
As for prejudice against immigrants and the rich...I mean, actual socialism is a proven failure many times over but when inequality gets to a certain level the rich can buy influence in ways that don't benefit everyone else. (The whole tax-prep scheme, for instance--there have been attempts to simplify taxpaying and Intuit has squashed it every time.) This is what both left-wingers screaming about rich white male billionaires and right-wingers screaming about Jewish billionaires are alluding to in different ways.
I think there's probably a limit to how much dynamism and 'creative disruption' a society can support...it's why Milei's libertarianism is good in Argentina (they're way too far toward the socialist, low-growth end) but both of our parties are moving in a populist direction.
Immigrants, well, when you get to a certain foreign-born percentage of the population people start feeling they're being replaced, it's just one of those human biases, people like to be around people who look and talk like them. I figure you can just shut down immigration for a few decades and then start it up again later once everyone's assimilated like we did in the 20th century. It's not as simple as 'immigration good or bad'--there's a healthy level of it.
>”I think contrary to popular belief and media propaganda a lot of young people love their parents and grandparents and also don't want the responsibility of having to pay for them in old age. “
I also love a lot of things that I would prefer not to pay for. This is not a coherent political ideology
I'm pretty sure that a majority of people support giving benefits to the old because the liberal leaning half of the voters support it because they support giving out benefits generally, and the hypocrite conservative elderly and soon-to-be elderly support benefits for just themselves.
On another note, the only other thinker/personality I've seen talk about gerontocracy with any gusto is Scott Galloway. For me personally I would love to collect Social Security benefits when I turn 62 in about 15 years. But I'm uncertain whether these benefits will actually exist in 2040 or whether they'll be so diluted by inflation and/or cuts to be irrelevant to me economically.
So in other words, I've come around to supporting the idea of SS reform; which could include:
1. The retirement age going up to 70.
2. Ending disability benefits for non-debilitating psychological disorders (don't get me started on how easy it is to get diagnosed with PTSD).
3. Means testing retirement benefits (this would probably affect me, but if it makes the program solvent then I'll just have to suck it up).
4. Abolishing the medical scam called Medicare and replacing with the ACA/Medicaid.
But these things will never happen because of political realities.
I'm 67 years old. I was checking out local gyms to join; one was offering a "Senior Discount" membership. I thought, why should I get a senior discount when I'm probably better off than the 20 to 40 year olds who want to join? So, I agree: let's shift resource allocation to the young and promising. But it would be great if can it could be done without "demagoguery" -don't promote hating grandpa and grandma!
Agree. However "senior discounts" are generally not part of a social effort to help needy seniors. It's just that particular business looking for a way to pull in customers. I'm not sure it always makes sense, but often it does.
Very thought provoking. Social Security has always been a wonderful Ponzi scheme. I'm 62 and would favor delaying that eligibility, but remember we all paid into it. There shouldn't be a FICA cap. Easiest solution? Embrace immigration!
Medicare is a different story. I'm desperate for it, and I'm healthy! Self employed and looking at skipping insurance next year, which is scary in your 60s. Universal Medicare, which would replace Medicaid, should be an option for any age. Why should you healthcare be a function of your employer? If I had children I never could have started my own business. There would be a lot of efficiencies to be gained. Insurance companies would still be around as they are now for Medicare. Think about why so many young people stay on their parents policies until 26? Why does a Senator, with a healthy paycheck, get stellar benefits while a home health aid gets nothing? We need to decouple Healthcare policy from generational debates.
The reason your health insurance is a function of your employer is this is the only way to get everyone in the covered pool to pay premiums. If the healthy don't have to buy insurance, they won't, just as you are thinking of not doing. Only the sick will, and this won't generate enough premium dollars to pay for the care those sick people will demand. If someone needs a million dollars worth of cancer care, it makes a big difference if only 100 people paid into that risk pool compared to if 10,000 did.
A public option in health care funding doesn't work. To keep the public plan solvent, everyone has to be enrolled in it (through taxes) otherwise it's exposed to adverse selection: the healthy won't sign up, figuring they're better off going naked. Again you end up with only sick poor people paying public premiums but demanding expensive treatments because they are too sick to work where they would get workplace-based private insurance. Sure you could allow enrolling for public benefits to be optional, but why would anyone forgo eligibility if they had to pay taxes as premiums to fund it anyway?
Even a private option doesn't work, for the same reason. If insurance isn't compulsory (as it is when the employer offers it), only the sick will enrol. All schemes have to somehow get premium dollars from the young and healthy (chiefly men, because we don't get pregnant or see doctors for medicalized "women's health" concerns.) You end up getting stuck with mandatory single-payer with maybe the right to buy supplemental private insurance if any companies will want to sell it. From the insurance company point of view, though, why should it reimburse for a service that the planholder could have gotten for free at taxpayer expense?
The challenge with demogoguing the old is that you need their votes to enact any reforms. That's why there needs to be a parallel effort to enlist *some* boomers to champion reform on behalf of younger generations.
Well, the baby boomer's fertility rate has been pretty much at replacement level. It is younger generations where it has been plunging to extremely low levels.
This point actually opens up the "who is to blame and should pay up" argument to the uncomfortable fact that a fundamental cause of the 'social security crisis' is demographic -- i.e., because young people are having so few kids. Now, I think it's silly to go down that (demagogic) road. But it is important to recognize that younger generations would likely be facing a kind of retirement crisis of their own even if there had been no social security system. Nobody is going to be around to sell services to the (millenial, gen x,z, etc) retirees of the future! (yes, that's an exaggeration) In this sense, all "retirement plans" are a kind of "ponzi scheme." Savings itself, with few exceptions, is always a kind of ponzi scheme.
The GW Bush proposed reforms were a missed opportunity. Despite the promises that current and near recipients would not be impacted, AARP and others apparently didn't believe it and mobilized against the plan. My understanding is that in retrospect, if the plan had been implemented, benefit levels would probably not have changed very much but solvency would have significantly improved.
Btw, I think a main feature of that program was that it was less about the "cut benefits vs raise taxes" debate and more about risk transfer. As structured the taxpayers absorb the risk of social security based retirement saving. Bush's plan shifted that risk back on the individual (they would have to manage their investment, 401 style). That approach didn't sell well for whatever reason. Maybe now that young people are so convinced that they won't receive any benefits at all, they would be open to that kind of change. Of course, the population is older now so you don't get nearly the same bang-for-the-buck we would have back in the GWB admin. Nevertheless, it could help sell a package that included other revisions.
Where to start? Much of the wealth of the elderly is illusionary, being tied mostly to inflated house prices. The very same overpriced houses the young find themselves shut out from. This wealth can only be accessed by selling or taking out debt against the house (reverse mortgages).
For those who were lucky to earn enough during their working years and thus able to invest wisely
in say, mutual funds, they were fortunate. Most people never earned enough; this includes women, blacks, the less educated, etc..
I find it somewhat ironic that talking heads are discussing deaths of despair among working class people; most of this population will never receive a SS check. Perhaps Hanania would like to speed up this process.
If there is one truism about the young, it is their shortsightedness. They like to think that nothing bad will ever happen to them: no prolonged absences from the workforce due to unemployment, no illnesses that eat up any resources they may have saved for the long term,
etc..
If the predictions of our tech overlords prove true that future technologies will eliminate many jobs,
perhaps young will eventually see the wisdom of having a guaranteed income of some sort.
Anyone can invest in a mutual fund. You don't have to be rich. You just have to make that monthly investment contribution *BEFORE* you buy cigarettes, weed, restaurant meals, bar drinks, and tattoos. Then you buy rent and groceries out of what you have left. If there's no money left over for those little luxuries that your friends indulge in, cry me a river.
Hanania imagine you're 70 years old, and you spent the whole time from 15 to 65 being taxed massively by the government to spend on the elders of your time. You accepted this taxation on your earnings that didn't benefit you, because you were implicitly promised that when you became old (or disabled) you would be given money by the government on the same program.
Now you're old, and you're drawing from it, and the same government comes around and says "about that promise, we don't want to raise taxes so no". Would you not be pissed? Most people would be, and reasonably so. No one wants a promise made to them broken. And yet you have a bunch of young people calling you selfish or "the problem", as if they wouldn't complain if they got stiffed on a promise.
They can try to use all sorts of excuses to get away with it. "But it's not the same money!" (as if money isn't fungible and financial institutions don't do a similar thing of not literally saving those specific dollar bills) or "but you're already wealthy" (you could have been wealthier if they weren't stealing your wages) or any number of other reasons for why they're breaking the agreement, but at the end of the day they're breaking the agreement and the 70 old you has every right to anger. If they didn't want to be in this situation, then they shouldn't have stolen from your earnings for 50 years promising to make it up later.
The government can do anything it wants if it is willing to go before the voters with it. The government doesn't care that you think it made you a promise those many decades ago. All the politicians whom you think made you that promise died a long time ago. Their replacements don't owe you anything.
"The government can do anything it wants if it is willing to go before the voters with it."
You're right, and the voters are continually choosing that they don't want the government to stiff them after taking large portions of their earnings for 50 years.
I think you misunderstand. The government doesn't have to listen to the voters and do what they tell it to. It only has to be willing to *tell* the voters what it's going to do. Big difference. In a democracy, the risk is that the government will give in to the demands of voters who tell it to do foolish things....like give generous Social Security benefits to old people when there aren't enough young working people to fund it. You will probably find that those young workers will tell the government to stop funding you. Tough luck, but that's money.
>The government doesn't have to listen to the voters and do what they tell it to.
If that was the case then we don't live in a democracy to begin with, in which case "the government should not be shit and lie" is even more of a moral imperative to want because the only thing worse than an authoritarian is one that is constantly flip flopping.
The people of Germany 1933-1945 or Russia 1917-present might disagree with you that an authoritative government is better than an indecisive one.
The government's main job is to keep order domestically and protect the realm from foreign invaders. Those are the two things that only governments can do. To do that it has to lie frequently to deceive its enemies foreign and domestic to keep them from getting the upper hand. Telling the truth is not a virtue in politics. It is best for citizens not to become dependent on government because you quite literally cannot trust the government to keep paying you money if it needs the money more to keep order and defend the borders.
It was a stupid promise to accept in the first place. You are supporting a pyramid scheme and forcing the next generation to pay in by law. What happens when we choose not to take part in it?
"It was a stupid promise to accept in the first place."
Would you accept that if someone broke a promise to you? "Sorry for taking lots of your money for 50 years, but it was a dumb idea so we're not filling our end of the bargain anymore"
Thing is, you can't *make* Phil Pencil take part in a promise that he was never consulted on. If I promise Peter that I will rob Paul (who is not yet born) to pay Peter, I can't come good on that promise if Paul refuses to be robbed when he grows up big and strong. Peter can whine, "But you promised!...." all he likes. Paul has the final say because it's his money, not Peter's. That's why governments never really *promised* to pay pensions forever. We only heard soothing words telling us what we wanted to hear and it sounded kind of like a promise.
Sure Peter will be upset that I reneged on my promise but Paul will tell Peter to go pound sand. There is nothing that Peter can do about it if Paul refuses to be taxed. Peter could take up arms against the government to force it to pay him with Paul's money but Peter is old and decrepit, no match for Paul's youth and vigorous ruthlessness to protect his own position.
>that I will rob Paul (who is not yet born) to pay Peter, I can't come good on that promise if Paul refuses to be robbed when he grows up big and strong. Peter can whine, "But you promised!...." all he likes. Paul has the final say because it's his money, not Peter's.
Then why didn't Peter have final say when the government took from him originally?
If you as an individual person say "Give me 10 bucks now and I'll give you 20 in two years" and then after two years say "I don't have any money, I gave it to Paul", my response is who cares, give me 20 bucks. If you have to go begging your mom for the cash, that's on you, not me. Don't make the promise if you can't fulfill it.
If we can expect that of ordinary people, then we should certainly be able to expect that from the government.
1) When the first Peter was robbed (taxed) there were a lot of young Peters and not many old Pauls. It didn't seem like a lot of money for each Peter and it seemed the decent thing to do, so Paul's elderly widow didn't have to live on cat food. Those early Peters voted for Social Security. They (or the government they elected) had the final say back then. The Peters all assumed that when they turned into Pauls, the upcoming Peters would feel the same way. Unfortunately those Peters forgot to have the children -- young Peters -- to turn into working Peters who would submit to taxation to provide the actual dollars they needed as Pauls. The few Peters there are now want to spend the money on themselves, not on the legion of elderly Pauls.
2) The government allows itself to get away with not paying what you think are debts or obligations. When you borrow $10 with a promise to pay $20, that is a contract that is enforceable by the state's lawcourts. If you put up an asset as security, as with a mortgage or a chattel loan, the lender can repossess the asset if you don't pay. It's all down in black and white and the state oversees the repossession process. Private contracts have to be honoured. The whole capitalist system would collapse if contracts weren't binding absolutely. If you refuse to vacate your house that's being foreclosed, the state will send bailiffs to evict you, backed up by armed police who can use lethal force if you resist the bailiffs with violence. Castle defence won't protect you. The only way you can somehow not pay a debt is by declaring bankruptcy. But the mortgage holder still gets first call on the house, after property taxes.
When the government makes promises to its citizens (or non-citizens for that matter), those promises aren't enforceable. That's the nature of government: It doesn't have to keep its promises. Why not? Because you can't force it to. Even if the government gave you, Peter, a written contract promising you that when you became a Paul, it would wring the money out of all the young Peters at the point of a gun no matter what, you can't enforce it because the government can pass a law invalidating any contract it makes, if that is in the "public interest". In the case of Social Security and Medicare, "the public interest" is to avoid the financial collapse if the government couldn't repay its loan obligations to big lenders, which *are* contracts. It doesn't have to pay you your Social Security but it does have to meet the interest on its debts. If it doesn't, it won't be able to borrow the trillions of dollars it has to finance everything it spends money on. America's creditors can hurt America if she can't pay. You can't hurt America if she doesn't pay you. Simple as that.
If you look at pension legislation closely, the government doesn't consider anything it does with ordinary citizens to have the status of a contract. You pay your taxes not because you made a contract promising to, but because the Income Tax law says you have to whether you want to or not. It might have made an "undertaking" or a "commitment" to fund pensions but unlike a private mortgage contract, a "commitment" isn't legally enforceable. You can try taking Uncle Sam to court claiming that he can't reneg on his Social Security promise, but you will lose. The bank will win if it takes *you* to court for not meeting your mortgage payments but you can't take the government to court for legislating itself out of its Social Security "promises". Legislation is a powerful tool that only the state's lawmakers have. And that is the big difference. A government's promise from one generation to another is simply not enforceable.
Edit: The only way you can intimidate the government into paying the Social Security benefits you think you are entitled to is to threaten to vote the lawmakers out of office if they reneg.... which is kind of what pensioners and soon-to-be pensioners have been doing all over the Western world. Yes, the politicians are afraid of being voted out, so the task of confronting the pension crisis just gets kicked down the road a few more years each time this comes up. The lawmakers hope to have died of comfortable old age before the shit hits the fan.
I think a naive way to reason why a voter might prefer policies helping the elderly over children is that everyone expects to become old, so they are near certain that a policy that helps the elderly will help them, but no voters are children, and many voters probably don't expect to be in a position where a policy that helps the elderly will help them (because their kids are grown already, or they don't plan to have kids).
I distrust any thinker who doesn’t begin with a deep contempt for public opinion
This is a fun line, but don't normies typically oppose both DEI things and the most stringent restrictions on abortion. I think there is a broad category of moral valiance things not directly involving money where a normie check on idealogues is a net good and scolding policy makers to listen more is useful. Immigration is probably the exception to that, but dont normies still support high skilled immigration? At least it seemed they did until recently
I like the general thrust of this article but i think it misses an important element: everyone gets old and most people have parents and grandparents. so if you do old people austerity, who ends up taking care of them? Yea the young people. And taking care of old people is a huge time and financial drain. Many people want to shunt mom and dad into a home, have the government pay, and not have to deal with that.
and lots of people don’t have kids and even if they do don’t want to rely on them. So being for old age entitlements is more rational for the young than it might look like at first glance.
Raising the retirement age could bypass this problem, given that we know people are living longer, healthier lives than they were when it was fixed at 65.
This was my immediate thought too. Is the alternative to all of these subsidies that every younger person becomes a full-time caregiver? I'm already seeing this happen with some members of my family as my grandparents become too old to care for themselves, and it's a scary prospect without good answers.
I think Richard's answer here would be (unironically) to encourage more voluntary euthanasia. As someone who doesn't want to get old, I'm more sympathetic to that view than some, but I do think it's worth noting that most of the options here are very bad.
Old people starving in the streets and young people being conscripted as caregivers seem like your other options, and both are very bad! A social safety net that massively privileges the old might be the best of a set of bad choices, even for the young. If we don't pay for the nursing home with taxes, then the next thing that happens is grandma moves in with you and your life becomes about taking care of her. I think many people would prefer to pay the taxes.
What is so bad about old people starving in the streets? It's the least utility-reducing demographic that could do that.
Any large demographic starving in the streets will basically destroy what you think of as modern society. Even if you personally have no morals and don't care about grandma, other people care about their families,, and those people will turn to ends you do not like when their families are starving.
The practical impacts would be things like:
-Massive increases to crime, as people are forced to steal for their families.
-An updated social contract in which grandma and grandpa move in with you after a certain point and you have (the younger person) to take care of them and support them.
-Enormous and persistent social unrest
-An incredible level of unpopularity for whatever politician caused all this, leading to anywhere from a political wave to some kind of open rebellion.
A big mistake made with this kind of cruelty-politics is the idea that you can costlessly make people who live in a place somehow disappear - by starving them, killing them, deporting them, imprisoning them, or whatever other method you want to suggest. As Trump is learning, making large numbers of people disappear from your society is actually incredibly hard to do, even if you have no morals and you personally find those people useless! Attempts to do this almost always turns out to be more costly than whatever price you were paying in having those people around.
Which, of course, is why things like social security and retirement benefits exist in the first place. It's not that people were duped by some radical liberal empathy, they were solving a big societal problem that was causing them a lot of personal pain.
Or, updated social contract in which you're expected to commit honorable suicide/attestupa at age 75.
You first
Maybe I will. Not sure what the point is of going on living when you're that decrepit.
Good points. I think it's as simple as everyone is afraid of getting old and helpless.
On a personal level, the prospect of ageing into despair seems to be a horror with no end but death, that still might await us all. But the struggles of the young feel temporary, something we all got past.
"everyone gets old"
At this rate, I should be so lucky!
If nothing else, this puts a measuring stick up to the problems that younger generations supposedly face. If the major downside of the solution to these problems is that they will have to care for their own parents for a few years, like everyone has done for millennia, then these problems we hear about can only be so bad and not worse.
Given the direction the world is heading, I don't expect to get old.
…t’t’talking ‘bout my generation…
I would focus on Medicare more than Social Security. Social Security has only just barely higher than a 1:1 payout ratio to average liifetime taxes paid ratio. So seniors can reasonably claim that they "paid for" their Social Security benefits. Medicare, on the other hand, is out of control with a greater than 3:1 ratio.
It is totally unfair that cash-strapped young and healthy adults have to pay exorbitant private insurance and provider rates while Boomers in six bedroom McMansions get Medicare. Medicare should be dissolved entirely. Seniors should be moved onto the private insurance market like everyone else. If they are genuinely poor (based on assets, not solely based on income) then give them a subsidy. But if they have a $2 million house, stock portfolio, or large pension then they should have to pay full freight. They can liquidate their large house (which is good for the economy by freeing up large homes for the families with several children who really need them) and downsize to a townhouse and pay for their health care with the proceeds of the sale.
Agreed. Medicare also has massive inherent waste because it's a payment in kind rather than a cash payment. Programs like that can and do give people health benefits that cost far more than they're worth to the beneficiary, driving up overall healthcare prices and wasting our collective resources. Giving people cash as the advantage of ensuring that it will be spent on something that they subjectively value.
But it has the disadvantage that people have short-term bias and will waste cash benefits in the short term when their interests would be better served by saving or insuring themselves. That might very well outweigh the waste you're talking about.
Perhaps, but it requires a pretty dim and paternalistic view to think that people are more wasteful with their own money than Medicare benefits. As evidence I would point to the markedly elevated prices of drugs in this country. People with incurable cancers are choosing drugs that cost $300k per year when a $10k per year option is available which would reduce their expected lifespan by a few weeks. No non-wealthy person would make that choice if it was their own money.
The high US drug prices are basically a disguised subsidy for pharma research. The expected value for the Medicare insurer (US government) isn't just the three weeks, it's also the resulting incentive for incremental progress toward even better treatments.
That isn't to say the whole system is Pareto optimal or anything. But when research costs are taken into account, the overseas prices are artificially low, and historically the public benefits of this kind of research have far outweighed the costs.
I don't disagree that this subsidizes drug research. I don't see how that makes it less wasteful. It sounds like you're saying some of the value of the drug price is R&D for future drugs, but this is just infinite regress. If due to these subsidies it's profitable to develop a drug that barely works and costs a fortune, the makers can stay profitable while destroying social value indefinitely. Why do we expect their next drug to be more useful than the last one?
That expectation comes from the fact that a more effective drug or procedure would be even more lucrative, and also great PR. Again I don't think this is the ideal system, a publicly funded prize system would probably be better, but no such system is in the offing and lower US drug prices would mean a lot less progress under the actual circumstances.
Profoundly tempting policy. My Boomer parents rattling around in their McMansion would say they can’t afford to downsize because there aren’t many townhomes nearby so they’re overpriced for their size—and voila, NIMBYism solved! Or, of course, they’re more than welcome to go in with me on a multi-unit property so I’m not stuck raising a baby in a one-bedroom apartment with no relatives within a thousand miles…It would also make health insurance extremely cheap for healthy young people. I would still lean towards at least a public option, but full privatization with generous subsidies for the poor seems better than the status quo.
In principle this makes sense, but the difficulty with your proposal is the same as the difficulty with a wealth tax: how do you get an accurate enough metric of wealth to apply the subsidy properly?
But you're absolutely right about SS. It was meant to be social insurance, basically an annuity that people were required to pay into. They did so, but the government was a poor steward of the trust fund and now that is coming home to roost.
It’s not hard at all…in fact we already have a program that covers this, it’s called Medicaid. Poor seniors are just as eligible for it as poor individuals of any age.
Is it really that hard to get a decent idea? Most people’s wealth is highly concentrated in their primary residence and retirement accounts. The IRS cares about subsidized retirement accounts already because you’re required to take minimum distributions at a certain age, and it’s quite easy to figure out the value of someone’s private residence, so this doesn’t seem too bad. The difficulty of calculation for a wealth tax aimed mainly at the very rich is much more serious, but this policy is aimed mainly at separating the genuinely needy elderly from those with sufficient savings, and that seems quite doable.
*1:1 payout to average lifetime taxes paid ratio* Apologies for the typo
You're able to just edit the post.
One of the things that drives me insane is the attitude that things like assisted living expenses shouldn't draw down your estate. "Grandma is having to sell her house to pay the exorbitant costs of the assisted living home! That's outrageous!" What?? When you are saving assets for retirement, you're saving for ...retirement, right?
well if you expect to inherit the home that's rather disappointing
Yeah everyone should pay higher taxes so we can make sure to keep the trust fund baby demographic going. Society doesn't need to support an expectation of inheritance.
Are we against generational wealth or not? Many people will not be lucky enough to inherit homes with or without medical expenses. I guess generational wealth is bad just above the cutoff of how much you expect to inherit.
Generational wealth *is* bad. The whole logic of it is unsound because inherited wealth is by definition an exchange of value A did not work to earn for value that B did. If A is good at being productive, this makes A less incentives to be productive. If A is not good at being productive, this at least keeps him from being a welfare case, but he tends to blow through it and become one anyway.
I commend you for your commitment to touch every political third rail. Can you do veterans next?
People in my state keep voting more and more expensive benefits to veterans, including a property tax exemption with no cap. We've got a bunch of service disabled veterans who "own" (nominally) small business government contractors, win contracts thru quotas, and live in mansions tax-free.
And "service disabled" ain't what it used to be. The VA is giving out more, and higher, disability ratings than ever before. Just about anyone exiting service can make a disability rating happen if they're interested in it. Some statistics here for a start:
https://usafacts.org/articles/how-much-money-does-the-federal-government-spend-to-support-disabled-veterans/
It may be a little bit too nuanced for people to understand, but an important part of this is the fact that Medicare in particular is a lose-lose program. Imagine you have enough money to afford a drug that cost $1,000 a month, but you would only be willing to pay $200 a month for it (at higher prices, you would do without or choose cheaper alternatives). If the subsidized price to you is $100 a month and Medicare pays the rest, you're going to take the drug, wasting $800 of society's money. In short, the program costs far more than the benefits are worth, and so cutting it won't harm beneficiaries nearly as much as it will benefit taxpayers.
This is unserious. A serious discussion of this issue would ask questions like how the benefits for these programs compare to the taxes the present-day elderly paid into the programs. Older people are wealthier on average, OK... but how much of the benefits are going to the wealthy ones as opposed to the poor ones? You don't even ask the question.
And when asking about whether to borrow money to fund the programs, surely things like the interest rates and inflation at the time the decision gets made should factor in. It's not just a matter of "you'll have to pay it eventually," that's not quite how public debt works and you should know that.
On the actual policy question, I'm fine with raising the retirement age and/or the 20-some percent benefit cut that would be needed to fix the shortfall. That's probably better than raising payroll taxes. But I'm not fine with you acting like the very sketchy points you make are obviously correct or that the issue is a no-brainer.
Maybe you've reached these conclusions for more sophisticated reasons and are dumbing your argument down for the audience? If so, it would be good to know. Your intellectual honesty has impressed me at times, but your "think from your gut" treatment of these age and wealth issues really calls it into doubt for me.
I think contrary to popular belief and media propaganda a lot of young people love their parents and grandparents and also don't want the responsibility of having to pay for them in old age. Also anyone over above 30 realizes they'll get old eventually and figures if you cut Social Security and Medicare there'll be *nothing* there for them when they get there.
I also think the general precariousness of middle-class and below life these days means people are going to want more supports. The catch with having too many poor people is they support illiberal programs to relieve their misery, whether it's Mamdani or mustache man.
As for prejudice against immigrants and the rich...I mean, actual socialism is a proven failure many times over but when inequality gets to a certain level the rich can buy influence in ways that don't benefit everyone else. (The whole tax-prep scheme, for instance--there have been attempts to simplify taxpaying and Intuit has squashed it every time.) This is what both left-wingers screaming about rich white male billionaires and right-wingers screaming about Jewish billionaires are alluding to in different ways.
I think there's probably a limit to how much dynamism and 'creative disruption' a society can support...it's why Milei's libertarianism is good in Argentina (they're way too far toward the socialist, low-growth end) but both of our parties are moving in a populist direction.
Immigrants, well, when you get to a certain foreign-born percentage of the population people start feeling they're being replaced, it's just one of those human biases, people like to be around people who look and talk like them. I figure you can just shut down immigration for a few decades and then start it up again later once everyone's assimilated like we did in the 20th century. It's not as simple as 'immigration good or bad'--there's a healthy level of it.
>”I think contrary to popular belief and media propaganda a lot of young people love their parents and grandparents and also don't want the responsibility of having to pay for them in old age. “
I also love a lot of things that I would prefer not to pay for. This is not a coherent political ideology
I'm pretty sure that a majority of people support giving benefits to the old because the liberal leaning half of the voters support it because they support giving out benefits generally, and the hypocrite conservative elderly and soon-to-be elderly support benefits for just themselves.
On another note, the only other thinker/personality I've seen talk about gerontocracy with any gusto is Scott Galloway. For me personally I would love to collect Social Security benefits when I turn 62 in about 15 years. But I'm uncertain whether these benefits will actually exist in 2040 or whether they'll be so diluted by inflation and/or cuts to be irrelevant to me economically.
So in other words, I've come around to supporting the idea of SS reform; which could include:
1. The retirement age going up to 70.
2. Ending disability benefits for non-debilitating psychological disorders (don't get me started on how easy it is to get diagnosed with PTSD).
3. Means testing retirement benefits (this would probably affect me, but if it makes the program solvent then I'll just have to suck it up).
4. Abolishing the medical scam called Medicare and replacing with the ACA/Medicaid.
But these things will never happen because of political realities.
I'm 67 years old. I was checking out local gyms to join; one was offering a "Senior Discount" membership. I thought, why should I get a senior discount when I'm probably better off than the 20 to 40 year olds who want to join? So, I agree: let's shift resource allocation to the young and promising. But it would be great if can it could be done without "demagoguery" -don't promote hating grandpa and grandma!
Agree. However "senior discounts" are generally not part of a social effort to help needy seniors. It's just that particular business looking for a way to pull in customers. I'm not sure it always makes sense, but often it does.
Yes such benefits can be more about encouraging in people during quiet daytime when people are working rather than rewarding elderly.
Very thought provoking. Social Security has always been a wonderful Ponzi scheme. I'm 62 and would favor delaying that eligibility, but remember we all paid into it. There shouldn't be a FICA cap. Easiest solution? Embrace immigration!
Medicare is a different story. I'm desperate for it, and I'm healthy! Self employed and looking at skipping insurance next year, which is scary in your 60s. Universal Medicare, which would replace Medicaid, should be an option for any age. Why should you healthcare be a function of your employer? If I had children I never could have started my own business. There would be a lot of efficiencies to be gained. Insurance companies would still be around as they are now for Medicare. Think about why so many young people stay on their parents policies until 26? Why does a Senator, with a healthy paycheck, get stellar benefits while a home health aid gets nothing? We need to decouple Healthcare policy from generational debates.
The reason your health insurance is a function of your employer is this is the only way to get everyone in the covered pool to pay premiums. If the healthy don't have to buy insurance, they won't, just as you are thinking of not doing. Only the sick will, and this won't generate enough premium dollars to pay for the care those sick people will demand. If someone needs a million dollars worth of cancer care, it makes a big difference if only 100 people paid into that risk pool compared to if 10,000 did.
A public option in health care funding doesn't work. To keep the public plan solvent, everyone has to be enrolled in it (through taxes) otherwise it's exposed to adverse selection: the healthy won't sign up, figuring they're better off going naked. Again you end up with only sick poor people paying public premiums but demanding expensive treatments because they are too sick to work where they would get workplace-based private insurance. Sure you could allow enrolling for public benefits to be optional, but why would anyone forgo eligibility if they had to pay taxes as premiums to fund it anyway?
Even a private option doesn't work, for the same reason. If insurance isn't compulsory (as it is when the employer offers it), only the sick will enrol. All schemes have to somehow get premium dollars from the young and healthy (chiefly men, because we don't get pregnant or see doctors for medicalized "women's health" concerns.) You end up getting stuck with mandatory single-payer with maybe the right to buy supplemental private insurance if any companies will want to sell it. From the insurance company point of view, though, why should it reimburse for a service that the planholder could have gotten for free at taxpayer expense?
The challenge with demogoguing the old is that you need their votes to enact any reforms. That's why there needs to be a parallel effort to enlist *some* boomers to champion reform on behalf of younger generations.
The reason older generations are so outsized in the electorate is that they chose to have below-replacement fertility.
Well, the baby boomer's fertility rate has been pretty much at replacement level. It is younger generations where it has been plunging to extremely low levels.
This point actually opens up the "who is to blame and should pay up" argument to the uncomfortable fact that a fundamental cause of the 'social security crisis' is demographic -- i.e., because young people are having so few kids. Now, I think it's silly to go down that (demagogic) road. But it is important to recognize that younger generations would likely be facing a kind of retirement crisis of their own even if there had been no social security system. Nobody is going to be around to sell services to the (millenial, gen x,z, etc) retirees of the future! (yes, that's an exaggeration) In this sense, all "retirement plans" are a kind of "ponzi scheme." Savings itself, with few exceptions, is always a kind of ponzi scheme.
Unless (fingers crossed) AI bails us all out.
The GW Bush proposed reforms were a missed opportunity. Despite the promises that current and near recipients would not be impacted, AARP and others apparently didn't believe it and mobilized against the plan. My understanding is that in retrospect, if the plan had been implemented, benefit levels would probably not have changed very much but solvency would have significantly improved.
Btw, I think a main feature of that program was that it was less about the "cut benefits vs raise taxes" debate and more about risk transfer. As structured the taxpayers absorb the risk of social security based retirement saving. Bush's plan shifted that risk back on the individual (they would have to manage their investment, 401 style). That approach didn't sell well for whatever reason. Maybe now that young people are so convinced that they won't receive any benefits at all, they would be open to that kind of change. Of course, the population is older now so you don't get nearly the same bang-for-the-buck we would have back in the GWB admin. Nevertheless, it could help sell a package that included other revisions.
Where to start? Much of the wealth of the elderly is illusionary, being tied mostly to inflated house prices. The very same overpriced houses the young find themselves shut out from. This wealth can only be accessed by selling or taking out debt against the house (reverse mortgages).
For those who were lucky to earn enough during their working years and thus able to invest wisely
in say, mutual funds, they were fortunate. Most people never earned enough; this includes women, blacks, the less educated, etc..
I find it somewhat ironic that talking heads are discussing deaths of despair among working class people; most of this population will never receive a SS check. Perhaps Hanania would like to speed up this process.
If there is one truism about the young, it is their shortsightedness. They like to think that nothing bad will ever happen to them: no prolonged absences from the workforce due to unemployment, no illnesses that eat up any resources they may have saved for the long term,
etc..
If the predictions of our tech overlords prove true that future technologies will eliminate many jobs,
perhaps young will eventually see the wisdom of having a guaranteed income of some sort.
Anyone can invest in a mutual fund. You don't have to be rich. You just have to make that monthly investment contribution *BEFORE* you buy cigarettes, weed, restaurant meals, bar drinks, and tattoos. Then you buy rent and groceries out of what you have left. If there's no money left over for those little luxuries that your friends indulge in, cry me a river.
Hanania imagine you're 70 years old, and you spent the whole time from 15 to 65 being taxed massively by the government to spend on the elders of your time. You accepted this taxation on your earnings that didn't benefit you, because you were implicitly promised that when you became old (or disabled) you would be given money by the government on the same program.
Now you're old, and you're drawing from it, and the same government comes around and says "about that promise, we don't want to raise taxes so no". Would you not be pissed? Most people would be, and reasonably so. No one wants a promise made to them broken. And yet you have a bunch of young people calling you selfish or "the problem", as if they wouldn't complain if they got stiffed on a promise.
They can try to use all sorts of excuses to get away with it. "But it's not the same money!" (as if money isn't fungible and financial institutions don't do a similar thing of not literally saving those specific dollar bills) or "but you're already wealthy" (you could have been wealthier if they weren't stealing your wages) or any number of other reasons for why they're breaking the agreement, but at the end of the day they're breaking the agreement and the 70 old you has every right to anger. If they didn't want to be in this situation, then they shouldn't have stolen from your earnings for 50 years promising to make it up later.
The government can do anything it wants if it is willing to go before the voters with it. The government doesn't care that you think it made you a promise those many decades ago. All the politicians whom you think made you that promise died a long time ago. Their replacements don't owe you anything.
"The government can do anything it wants if it is willing to go before the voters with it."
You're right, and the voters are continually choosing that they don't want the government to stiff them after taking large portions of their earnings for 50 years.
I think you misunderstand. The government doesn't have to listen to the voters and do what they tell it to. It only has to be willing to *tell* the voters what it's going to do. Big difference. In a democracy, the risk is that the government will give in to the demands of voters who tell it to do foolish things....like give generous Social Security benefits to old people when there aren't enough young working people to fund it. You will probably find that those young workers will tell the government to stop funding you. Tough luck, but that's money.
>The government doesn't have to listen to the voters and do what they tell it to.
If that was the case then we don't live in a democracy to begin with, in which case "the government should not be shit and lie" is even more of a moral imperative to want because the only thing worse than an authoritarian is one that is constantly flip flopping.
The people of Germany 1933-1945 or Russia 1917-present might disagree with you that an authoritative government is better than an indecisive one.
The government's main job is to keep order domestically and protect the realm from foreign invaders. Those are the two things that only governments can do. To do that it has to lie frequently to deceive its enemies foreign and domestic to keep them from getting the upper hand. Telling the truth is not a virtue in politics. It is best for citizens not to become dependent on government because you quite literally cannot trust the government to keep paying you money if it needs the money more to keep order and defend the borders.
It was a stupid promise to accept in the first place. You are supporting a pyramid scheme and forcing the next generation to pay in by law. What happens when we choose not to take part in it?
"It was a stupid promise to accept in the first place."
Would you accept that if someone broke a promise to you? "Sorry for taking lots of your money for 50 years, but it was a dumb idea so we're not filling our end of the bargain anymore"
Thing is, you can't *make* Phil Pencil take part in a promise that he was never consulted on. If I promise Peter that I will rob Paul (who is not yet born) to pay Peter, I can't come good on that promise if Paul refuses to be robbed when he grows up big and strong. Peter can whine, "But you promised!...." all he likes. Paul has the final say because it's his money, not Peter's. That's why governments never really *promised* to pay pensions forever. We only heard soothing words telling us what we wanted to hear and it sounded kind of like a promise.
Sure Peter will be upset that I reneged on my promise but Paul will tell Peter to go pound sand. There is nothing that Peter can do about it if Paul refuses to be taxed. Peter could take up arms against the government to force it to pay him with Paul's money but Peter is old and decrepit, no match for Paul's youth and vigorous ruthlessness to protect his own position.
>that I will rob Paul (who is not yet born) to pay Peter, I can't come good on that promise if Paul refuses to be robbed when he grows up big and strong. Peter can whine, "But you promised!...." all he likes. Paul has the final say because it's his money, not Peter's.
Then why didn't Peter have final say when the government took from him originally?
If you as an individual person say "Give me 10 bucks now and I'll give you 20 in two years" and then after two years say "I don't have any money, I gave it to Paul", my response is who cares, give me 20 bucks. If you have to go begging your mom for the cash, that's on you, not me. Don't make the promise if you can't fulfill it.
If we can expect that of ordinary people, then we should certainly be able to expect that from the government.
Off hand, two reasons:
1) When the first Peter was robbed (taxed) there were a lot of young Peters and not many old Pauls. It didn't seem like a lot of money for each Peter and it seemed the decent thing to do, so Paul's elderly widow didn't have to live on cat food. Those early Peters voted for Social Security. They (or the government they elected) had the final say back then. The Peters all assumed that when they turned into Pauls, the upcoming Peters would feel the same way. Unfortunately those Peters forgot to have the children -- young Peters -- to turn into working Peters who would submit to taxation to provide the actual dollars they needed as Pauls. The few Peters there are now want to spend the money on themselves, not on the legion of elderly Pauls.
2) The government allows itself to get away with not paying what you think are debts or obligations. When you borrow $10 with a promise to pay $20, that is a contract that is enforceable by the state's lawcourts. If you put up an asset as security, as with a mortgage or a chattel loan, the lender can repossess the asset if you don't pay. It's all down in black and white and the state oversees the repossession process. Private contracts have to be honoured. The whole capitalist system would collapse if contracts weren't binding absolutely. If you refuse to vacate your house that's being foreclosed, the state will send bailiffs to evict you, backed up by armed police who can use lethal force if you resist the bailiffs with violence. Castle defence won't protect you. The only way you can somehow not pay a debt is by declaring bankruptcy. But the mortgage holder still gets first call on the house, after property taxes.
When the government makes promises to its citizens (or non-citizens for that matter), those promises aren't enforceable. That's the nature of government: It doesn't have to keep its promises. Why not? Because you can't force it to. Even if the government gave you, Peter, a written contract promising you that when you became a Paul, it would wring the money out of all the young Peters at the point of a gun no matter what, you can't enforce it because the government can pass a law invalidating any contract it makes, if that is in the "public interest". In the case of Social Security and Medicare, "the public interest" is to avoid the financial collapse if the government couldn't repay its loan obligations to big lenders, which *are* contracts. It doesn't have to pay you your Social Security but it does have to meet the interest on its debts. If it doesn't, it won't be able to borrow the trillions of dollars it has to finance everything it spends money on. America's creditors can hurt America if she can't pay. You can't hurt America if she doesn't pay you. Simple as that.
If you look at pension legislation closely, the government doesn't consider anything it does with ordinary citizens to have the status of a contract. You pay your taxes not because you made a contract promising to, but because the Income Tax law says you have to whether you want to or not. It might have made an "undertaking" or a "commitment" to fund pensions but unlike a private mortgage contract, a "commitment" isn't legally enforceable. You can try taking Uncle Sam to court claiming that he can't reneg on his Social Security promise, but you will lose. The bank will win if it takes *you* to court for not meeting your mortgage payments but you can't take the government to court for legislating itself out of its Social Security "promises". Legislation is a powerful tool that only the state's lawmakers have. And that is the big difference. A government's promise from one generation to another is simply not enforceable.
Edit: The only way you can intimidate the government into paying the Social Security benefits you think you are entitled to is to threaten to vote the lawmakers out of office if they reneg.... which is kind of what pensioners and soon-to-be pensioners have been doing all over the Western world. Yes, the politicians are afraid of being voted out, so the task of confronting the pension crisis just gets kicked down the road a few more years each time this comes up. The lawmakers hope to have died of comfortable old age before the shit hits the fan.
I think a naive way to reason why a voter might prefer policies helping the elderly over children is that everyone expects to become old, so they are near certain that a policy that helps the elderly will help them, but no voters are children, and many voters probably don't expect to be in a position where a policy that helps the elderly will help them (because their kids are grown already, or they don't plan to have kids).
I distrust any thinker who doesn’t begin with a deep contempt for public opinion
This is a fun line, but don't normies typically oppose both DEI things and the most stringent restrictions on abortion. I think there is a broad category of moral valiance things not directly involving money where a normie check on idealogues is a net good and scolding policy makers to listen more is useful. Immigration is probably the exception to that, but dont normies still support high skilled immigration? At least it seemed they did until recently