Baby Boomers: From Pensions to Wall Street, The Unsustainable Generation
Like most uncomfortable facts these days, startling research conducted in a 2009 study was swept quietly under the media rug. The study I'm referring to reveals the unsustainable nature of government expenditures that are being spent on baby boomers (the American generation born between 1946 and 1964) now and in the near future, as they begin to retire en masse in the next 20 years.
Among these uncomfortable facts:
Government spends 2.4% more, per capita, on the elderly than they do on children, and this number is increasing every year as more and more boomers retire Despite this unequal expenditure ratio, children are at twice a greater risk of material hardship and poverty than baby boomers Economists predict that millennial taxpayers will pay drastically more for baby boomers' healthcare, social security, and other benefits than boomers did for their parents If policy isn't changed between now and the year 2050, the entirety of the federal budget will be spent on boomer benefits
Let's clarify a few things here. First, it's not uncommon or unrealistic to assume that governments pay more for the elderly; children don't need as much healthcare as the elderly, and retirees don't have an income to pay for everything. Baby boomers have done a great service to our country in their lifetime of work, raising families, and contributing to society.
Most importantly, this article isn't going to complain that their generation "gets more" than any other. The issue at hand isn't about intergenerational inequality; it's about intergenerational responsibility.
Baby boomers, when they were our age, had top-notch K-12 and college education. They had first-class infrastructure -- roads and highways and airports to connect the nation, aqueducts to bring water to cities and drain land for agriculture, new buildings to house schools and libraries and hospitals. All the while, economic growth increased at a sustainable level. Between 1953 and 1968, there were two economic booms and two busts -- the booms lasted three and four years, the busts barely six months.
The undebateable reality is that these public investments provided incredible opportunities for baby boomers (nearly 48% of American CEOs received their undergraduate degree from public schools) and increased their quality of life (throughout their lives boomers, by a long margin, are the wealthiest and healthiest generation in American history).
But these investments were paid for by somebody. In the 1950s and 60s, that tax base was composed of baby boomers' parents and grandparents (the Silent and Greatest generations). In 1955, the top marginal federal tax rate was 90% (those making $200,000, or $1.6 million in today's dollars), and the median marginal tax rate was 26% (those making $5,000, or $42,000). And that was just income. While sales tax was low to nonexistent for the most part, property taxes were relatively high, (10%-30%) and capital gains tax could peak at 50%. In comparison, in 2012, the top marginal tax rate as well as capital gains is 35%, sales tax varies by state but can peak around 12%, and property taxes are at an all-time low, if not virtually nonexistent.
You can tell a nation's values by how it spends money collected from hard-working taxpayers. When the boomers came of age, their parents had clearly valued their children's future, demonstrated by the taxes they paid and the investments they made in society. Sixty years later, boomers are still benefitting from a substantial degree of taxpayer dollars. In a stark about-face, the people that will be footing the baby boomer bills aren't their parents -- it's their own kids.
The next few sentences are hard for me as a millennial to write. There are a lot of incredible things boomers have done for our country, and I admire and learn from many of them. But, history reveals a gaping leadership and responsibility gap between boomers and their parents. Somehow, some way, the shared generational value of baby boomers' parents -- that of civic investment and "paying it forward" through taxes and good governance -- was not transferred to their children, who now, paradoxically, seem to want less government and less taxes, despite having spent the majority of their lives depending on big government and tax revenue.
The facts are clear. Boomers have received the most government investment in a century and in many ways, it has paid off. But how will they pay it forward? When will they realize they have the future of America in their hands? As the biggest and most participative voting bloc, theirs is the most influential generation of the electorate.
Nations fall when they rest on their laurels; nations progress when each generation wins their own. To every boomer, I ask: how can we millennials live by this rule, if our role models have rested on their own parents' laurels for far too long?