Samuelson thinks that the rising costs of entitlement programs for the elderly, Medicare and Medicaid, will prompt a revolt on the part of younger workers who will be forced to pay sharply higher taxes to support them.
...a generational backlash is inevitable. It may not come as attacks on sunbathing retirees, but the idea that younger workers will meekly bear the huge tax increases needed to pay all boomers' promised benefits is delusional. The increases are too steep, and too many boomersfairly wealthy and healthywill seem undeserving.
Consider: In 2007, Social Security, Medicare and Medicaid constitute 44 percent of the $2.7 trillion federal budget. To pay all future benefits could (depending on assumptions) easily require tax increases of 30 to 50 percent by 2030. Many retirees are quite comfortable. About 42 percent of Americans ages 65 to 75 have assets (homes, stocks, cash) worth $250,000 or more; 23 percent have annual incomes exceeding $69,000, says the Employee Benefit Research Institute.
Second, boomers will want even more benefits...
Out in front will be the 38millionmember AARP, the nation's most powerful interest group. In the past four years, notes National Journal, it's spent $88 million on lobbying. AARP says that in the last election half the voters were older than 50 and a quarter were its members. AARP's new public relations campaign (slogan: "Divided We Fail") misleadingly aims to project an unselfish and high-minded image. In practice, it means AARP will support higher government spending for all age groups, which (of course) will increase taxes further for tomorrow's workers.
Social Security and Medicare are an essential part of the social fabric. Millions depend on them. But the vast benefitspaid too early and too indiscriminatelyhave become disconnected from genuine need. Unless the two are reconnected, these successful programs will tear at the social fabric. It is unfair to blame only baby boomers for not acting preemptively to curb the known costs of their retirement. The "greatest generation" bears equal responsibility. Politicians have done nothing, because voterspresent and prospective retireeshave wanted them to do nothing. Still, boomers deserve special disapproval.